SOLICITOR GENERAL: GOVT WILL APPEAL SC RULING ON NAIA-3
MANILA, December 23, 2005 (STAR) By Aurea Calica - The government will still ask the Supreme Court to reconsider its Tuesday decision ordering it to pay $3.2 billion as compensation to Philippine International Air Terminals Co. (Piatco) for its seizure of Ninoy Aquino International Airport’s moothballed Terminal 3 (NAIA-3).Solicitor General Alfredo Benipayo said paying off Piatco would not necessarily pave the way for the long-delayed opening of the new facility.
The government wants to find out from the court which entity is entitled to the compensation first to ensure a smooth opening of the terminal.
Malacañang officials earlier indicated that the government would likely pay Piatco rather than appeal the decision to avoid a lengthy legal process and finally operate the terminal.
"It’s not that we do not want to pay. We are willing to pay but we want the court to determine who among the claimants should be paid first," Benipayo told The STAR in a telephone interview.
"Because if we pay Piatco and not Takenaka, which is the builder of the terminal, then Takenaka would not cooperate in the opening of the airport," he noted.
The government needs the cooperation of the Japanese construction firm and Piatco subcontractor to operate the airport, he said, but Piatco would not pay the firm even if it gets the P3.2-billion compensation.
"In that case, the terminal will never be opened. We want the people who should be paid first to be paid first," Benipayo explained.
Press Secretary Ignacio Bunye said the government would want to open the terminal as soon as possible "within the parameters of a just and fair settlement in the public interest."
"The airport will definitely spur economic growth by stimulating investments, jobs and promoting solid tourism," Bunye said.
Piatco’s former German partner, Fraport AG, is also claiming compensation.
Benipayo also disclosed that there were other shareholders, including Takenaka, which remain unpaid and are claiming about $100 million.
Benipayo said if the government pays the $62 million in initial payment as ordered by the Pasay City Regional Trial Court, "the other claimants will be prejudiced."
"At the very least, Fraport and Takenaka as well as other shareholders ought to be notified of any order of distribution of the deposit."
Malacañang officials said Wednesday that it was likely to pay P3.2 billion as ordered by the SC to finally settle the ownership dispute between the government and Piatco.
In separate statements, Executive Secretary Eduardo Ermita and Bunye said the government’s priority was to have NAIA-3 opened as soon as possible to send a positive signal to investors and the international community that things are moving in the country.
Appealing the SC decision would delay the opening of the airport, Ermita explained.
Ermita said an automatic option would be for the government to appeal the SC decision but the process would take several months and its outcome would be uncertain.
"One option is to follow immediately the order of the Supreme Court since the money after all is there, pay it immediately so that we perfect the ownership of the airport and go on with the completion of the airport by the contractor so that we can still meet the deadline of opening it by late first quarter of 2006," he said.
"The normal recourse is the motion for reconsideration and we will discuss it whether it would cause delays in the opening so we might just decide (not to) file a motion for reconsideration."
Ermita said the government would borrow from banks, particularly the Development Bank of the Philippines, to raise money and fully compensate Piatco.
Officials earlier said the government plans to operate the airport and revenues from its operations would be used as compensation.
Piatco is currently seeking over $500 million in a suit against the government before an international arbitration court in Singapore.
The consortium said the government cannot exercise ownership of the terminal until it compensates Piatco.
The government also has to contend with Asia’s Emerging Dragon Corp. (AEDC), a company owned by beer and tobacco magnate Lucio Tan.
AEDC claims it has the legal right to operate the terminal because the Supreme Court in 2003 nullified Piatco’s government contract to build and operate the terminal for irregularities.
The company had recently asked the Supreme Court to stop the government from entering into any contract with Piatco.
AEDC made an unsolicited proposal to build the terminal in 1994 following a government invitation and was awarded the contract in 1996. AEDC lost the contract to Piatco when the consortium made a better offer.
AEDC is offering over $350 million for the right to operate the terminal.
NAIA-3 was completed in 2002 but its opening was delayed by a squabble between Piatco and Fraport AG.
The terminal was delayed further in 2003 when President Arroyo revoked Piatco’s contract with the government on the grounds that certain terms were illegally renegotiated by her deposed predecessor, Joseph Estrada, in 1998.
Last December, the government seized the terminal from Piatco after the Supreme Court nullified Piatco’s contract. Piatco is currently contesting the expropriation.
Joint venture at NAIA eyed
Two administration congressmen proposed yesterday that the government enter into a joint venture with Philippine International Air Terminals Co. (Piatco) for the operation of the controversial airport Terminal 3.
In a statement, Reps. Prospero Pichay Jr. of Surigao del Sur and Ernesto Nieva of Manila said a joint venture would enable the government to operate the new passenger terminal in the first quarter of 2006.
They said instead of paying Piatco, which constructed the terminal on a build-operate-transfer basis for P3 billion as required by the Supreme Court before taking over the facility, the state could turn this into a "win-win arrangement" with the builder-proponent.
A joint venture would be advantageous to both sides, with the government not being required to immediately pay the balance and with Piatco remaining a stakeholder in the project, they said.
They added that the two sides could explore other arrangements that would be beneficial to both of them.
"What is important is for the country to be able to open the new passenger terminal in the first quarter of the coming year at the latest. The opening of Terminal 3 will definitely boost investor confidence and generate more economic activities in the country. It will be instrumental in our national progress," they stressed.
They pointed out that the new building "has been a white elephant for some time now, and the government certainly does not want it to become a monument of waste and lost opportunities."
The Supreme Court had voided Piatco’s contract for Terminal 3, but had required the government to pay the builder an initial $65 million. Piatco is claiming at least $350 million for the terminal. That is the lowest estimate for the costs it incurred in constructing the facility. The highest is $650 million.
Piatco has lodged a complaint against the government with a World Bank arbitration body. The case is still pending.
The Senate Blue Ribbon Committee, which had looked into Piatco’s contract, found it to be highly anomalous. Senators discovered anomalous expenses, including a $2-million (more than P100 million) payment to a public relations consultant.
They also found out that an underground tunnel that would connect the Centennial Terminal to Terminal 3 had not been built. — Jess Diaz
Chief News Editor: Sol Jose Vanzi
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