JOKER:  WHY  PAY  PIATCO  P3 BILLION?

MANILA, SEPTEMBER 11, 2006
(STAR) By Christina Mendez - The government may have overcome the last legal obstacle to its takeover of Ninoy Aquino International Airport Terminal 3 (NAIA-3), but it may have to explain its insistence in shelling out P3 billion for the mothballed terminal’s builder.

Sen. Joker Arroyo said he was surprised by the decision of the Court of Appeals which, "in unbecoming haste," lifted late Friday the temporary restraining order on the payment of P3 billion to Philippine International Air Terminals Co. (Piatco), thus setting the stage for the NAIA-3 takeover.

"There is something fishy about the way the government is handling the Piatco deal. The government will pay today, in unbecoming haste, P3 billion or roughly $600 million for Terminal 3," said Arroyo, who chairs the Senate Blue Ribbon Committee that investigated and later declared as null and void the Piatco deal a few years ago.

In Helsinki, Finland, President Arroyo said the government hoped to open NAIA-3 no later than mid-2007 with an assurance of "just and fair" compensation for its builders.

Mrs. Arroyo, on the suggestion of Trade Secretary Peter Favila, may dramatize her commitment to have the facility opened as soon as possible by disembarking at the airport or having lunch there upon her return from a five-nation working trip to Europe and the Pacific.

Senator Arroyo said the government should justify its readiness to part with P3 billion, which, he argued, was "almost double" the original contract amount with Piatco.

He said he found it baffling why the government stubbornly wanted to take over NAIA-3 despite the Supreme Court ruling declaring the contract with Piatco null and void. He said the arguments in the Supreme Court ruling were basically the same as the ones raised by the Senate Blue Ribbon Committee which had conducted its own inquiry into the matter.

Three Senate committees were involved in the probe: Arroyo’s Blue Ribbon committee, committee on public works and committee on constitutional amendments, revision of codes and laws.

"More to the point, during the 2003 hearings or three years ago, the costing for the Terminal 3 was in the neighborhood of $300-million. Why oh why does the government now want to pay almost double?" Senator Arroyo asked.

"The government’s handling of Piatco makes a mockery of the High Court’s ruling on the fraudulent character and nullity of the Piatco contract," he said.

He said the contract was amended five times and that each time it was revised, Piatco did a lot less than its original undertaking. "Yet it will be paid almost double that what was approved by government," the lawnaker said.

In a statement, Arroyo said the controversy came at a worse point when the Sandiganbayan dismissed the charge against Cheng Yong and other Piatco officials.

Cheng Yong’s equity in Piatco is only 17 percent while Germany’s Fraport AG is over 65 percent. "Yet, on paper, it is Cheng Yong who owns the majority and Fraport is the minority owner, to satisfy statutory requirements for foreign equity," the senator said.

"Foreign chambers of commerce never tire of complaining that the judiciary keeps on intervening in business decisions. Of course, they (courts) will and they must whenever laws are violated, such as on corruption," Arroyo said.

He advised foreign investors like Fraport "not to get entangled with local investors whom they do not know."

Arroyo also lamented the Sandiganbayan’s dismissal of charges against one Alfredo Liongzon, said to be Piatco public relations man who received the "unheard of amount of $2-million or P100 million for negotiating amendments to the original contract."

"Probable cause was not established, according to the Sandiganbayan," he said.

He said the three Senate committees that investigated the Piatco case discovered that the contract underwent several revisions and that the transportation secretary at the time might have allowed the consortium to back out of prior commitments.

The committees, Sen. Arroyo said, had also found out that the Cheng Yong group had invested a minuscule amount in the project compared to that of its German partners, Fraport AG. He described it as a glaring disparity between equity and actual capital.

Sen. Arroyo said the Manila International Airport Authority (MIAA) and the Cabinet-level Investment Coordination Committee (ICC) should also explain their approval of the concession agreement the DOTC signed with Piatco.

Won’t contest TRO lifting

Meanwhile, the lawyer for Ilocos Sur Rep. Salacnib Baterina, who had challenged the government’s NAIA-3 takeover bid, said he would no longer contest CA’s lifting of its TRO.

Lawyer Jose Bernas told The STAR that he believed that any effort to keep the TRO in effect would be futile due to lack of time.

"I don’t think there’ll be time for us to stop the payment of the P3 billion," Bernas said even as he admitted that he was caught off guard by the CA decision.

"I cannot explain why the CA lifted the TRO on Friday even if the CA gave us until Monday to file memoranda and the Solicitor General withdrew its motion to lift the TRO and Piatco did not join the motion to lift," he said. "For the CA to have lifted the TRO ahead of Monday is difficult to comprehend and explain."

But Bernas said his client Baterina hopes to file today with the Supreme Court a motion to immediately schedule the oral argument on the expropriation issue.

"I don’t think we would be able to stop the government from paying the P3 billion deposit to Piatco. There won’t be enough time for us to do it, particularly if the government is bent on making the payment (today). In any event, if the Supreme Court finds merits on our opposition to the expropriation proceedings over NAIA Terminal 3, then it can correct whatever grave abuse of discretion the lower court may have rendered on the matter," Bernas said.

He stressed that what the Supreme Court declared in the case was that there should be payment of just compensation to Piatco if government decided to expropriate NAIA-3.

"The Supreme Court did not say to pay (the P3 billion to Piatco), it said to pay (the P3 billion) if government will expropriate," Bernas explained.

Smooth takeover seen

Meanwhile, Press Secretary Ignacio Bunye lauded the CA decision and expressed hopes for a smooth government takeover of NAIA-3.

"We are confident that the expropriation process will take its proper course," Bunye said. "We are looking forward to the opening of the facility, hopefully before the end of the year."

"When the President learned of the decision, she remarked: ‘Good. In that case we will have lunch at the Terminal 3 when we come back,’" he said.

Favila said it would take at least six months before the airport could fully operate.

"According to the airlines it would take six to nine months to transfer their facilities (to NAIA-3)," Favila said. "Given that, maybe in the middle of next year it can fully operate."

He was referring to the transfer of international airlines from the old NAIA-1 to the new airport as planned by the government. NAIA-1 would be converted into a terminal for domestic flights.

"The forthcoming opening of the NAIA-3 will be a historic day for the people and a big boost to the economy as this will signal better public services and business confidence," Bunye said.

The officials, however, said there is no final decision yet as how the government will fully compensate Piatco and its foreign partners-Fraport AG of Germany and Takenaka Corp. of Japan.

Executive Secretary Eduardo Ermita earlier said the government is set to pay Piatco P3 billion as early as today as downpayment for the compensation. The full value of the facility is still being determined by independent valuators hired by both parties.

Favila also gave assurances that the contracts entered into by the MIAA and tenants and concessionaires will be recognized as long they "have been legally and legitimately entered into."

Bunye said the "sovereign interest of the people will continue to be the guiding mandate of the government while we assure that all legitimate commercial interests will be served under the standards of fairness and transparency."

CA’s Eight Division, in a four-page resolution penned by Associate Justice Renato Dacudao on Friday, upheld the argument of the Solicitor General that the Supreme Court had already affirmed the right of Piatco to be paid the proffered value of P3-billion prior to the enforcement of the writ of possession issued by the Pasay Regional Trial Court on Dec. 21, 2004. — With Paolo Romero, Rainier Allan Ronda, Jose Rodel Clapano


Chief News Editor: Sol Jose Vanzi

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