SC orders gov’t to pay Piatco P3 billion for NAIA-3

The Supreme Court (SC) ordered the Philippine government yesterday to pay up to P3 billion to a consortium led by Germany’s Fraport AG for the Ninoy Aquino International Airport Terminal 3 (NAIA-3) it expropriated last year.

In a 64-page decision penned by Associate Justice Dante Tinga, the High Tribunal upheld a decision by a lower court in January that had said the government must pay back the consortium to recover its investment in the mothballed passenger terminal.

The SC said Pasay Regional Trial Court (RTC) Branch 117 Judge Henrick Gingoyon did not err when he ruled earlier this year that the Philippine International Air Terminals Co. (Piatco) was entitled to just compensation.

"There can be no doubt that Piatco has ownership rights over the facilities which it had financed and constructed," the SC said in its ruling, adding that the implementation of the writ of possession dated Dec. 21, 2004 is held in abeyance, pending payment by the government to Piatco of P3 billion, representing the proffered value of the NAIA-3 facilities.

The government has 15 days to appeal the SC decision.

Fraport AG owns 30 percent of Piatco while Filipino partners control the rest.

Cheng Yong of Piatco expressed satisfaction over the high court’s decision.

"As principal stockholder of Piatco, we are very pleased that the SC appreciated the value of Piatco. Its stockholders and employees worked very hard to build for the Filipino people and this nation," Cheng said in a statement.

"We hope that the SC’s latest decision will pave the way for the government’s realization that the government should not view us as adversaries but as partners," he added.

President Arroyo revoked the consortium’s contract with the government, citing what her advisers said were terms that were unfavorable to the government.

The deal was signed by her predecessor, deposed President Joseph Estrada, who is now in detention while being tried on corruption charges.

Despite all the previous wrangling and arguments between Piatco and the government, Cheng expressed willingness to resume amicable relations to settle the matter.

"We remain willing to be the government’s partner in this endeavor with the SC’s blessings. We look forward to the resumption of amicable talks with the government with the end view of setting a realistic opening day for NAIA-3 and a real, definitive and fair resolution of all controversies," he said.

The government and Piatco conducted several rounds of negotiations regarding the NAIA-3 facilities and the arbitral proceedings were even commenced before the International Chamber of Commerce International Court of Arbitration and the International Centre for the Settlement of Investment Disputes.

It was not clear, though, how the SC decision would affect that case.

Fraport AG had demanded compensation of $465 million for the terminal project.

Manila International Airport Authority general manager Alfonso Cusi, for his part, told The STAR that MIAA has not yet been furnished a copy of the ruling.

"Wala pa kaming kopya. Nagpapakuha pa ako ng kopya para mapag-aralan (We don’t have a copy. I already requested for a copy so we can study it). But immediately, the course is to file a motion for reconsideration," Cusi said.

The Department of Transportation and Communications (DOTC) and Asia’s Emerging Dragon Co. (AEDC) were also waiting for their copies as of press time yesterday.

"I think we will have to wait to get a copy of that and then think of the next step," Roberto Castañares, DOTC assistant secretary for projects and planning, said.

Earlier, Transportation and Communications Secretary Leandro Mendoza said the government aims to open NAIA-3 in the first half of 2006. But to put the passenger terminal into full operation the government has to pay $50 million to $100 million to the Japanese construction firm of Takenaka Corp.

The government had earlier identified 40 construction defects in the terminal project.

"We will have the money to pay Takenaka but the actual price is still under negotiation," Mendoza said, adding that without the additional civil works that Takenaka had promised to complete, the government could not possibly open the new terminal.

The Development Bank of the Philippines had offered to raise P27 billion for the MIAA to operate NAIA-3.

The troubled Fraport project began in 1994, originally initiated by a consortium of Chinese-Filipino businessmen. The group transferred the concession agreement to the Fraport group in 1997. — With reports from Rainier Allan Ronda, Sandy Araneta, AFP