MANILA, JANUARY 8, 2011 (STAR) By Aurea Calica – Malacañang said yesterday that just compensation for the builders of the Ninoy Aquino International Airport Terminal 3 should finally be resolved under the Aquino administration.

“On my own, (I) took the initiative and called up (Transportation) Secretary Ping (Jose de Jesus) and told him that in my belief, it’s about time that under this new administration there must be a firm stand, a calculation of what is really fair and reasonable compensation for this,” Executive Secretary Paquito Ochoa Jr. said over radio dzRH.

He said this could be the start of discussions on how much should be paid for the terminal after expropriation proceedings.

Ochoa stressed that the government’s possession of NAIA 3 would not be affected by the International Centre for Settlement of Investment Disputes’ (ICSID) Dec. 23 decision allowing German firm Fraport AG to initiate new proceedings against the Philippines for just compensation.

An expropriation case is still pending before the Pasay City Regional Trial Court and remains an obstacle to NAIA 3’s full operation.

The ICSID’s decision may pose another legal problem, as this was a reversal of its August 2007 ruling dismissing Fraport’s case against the Philippines.

The International Criminal Court in Singapore had also ruled in favor of the Philippine government in the arbitration case against the Philippine International Air Terminals Co. (Piatco).

Ochoa said the ICSID’s Dec. 23 decision merely brought the case back to zero and did not tackle any compensation for Fraport.

He said the government paid a deposit as required under the rules of expropriation proceedings so it could take possession and partially operate NAIA 3 and would have to wait for the court to decide on just compensation.

“The status of the case is that the judge is still determining the reasonable and fair compensation,” Ochoa said.

On Thursday, President Aquino said he was committed to finding a resolution to the NAIA 3 case and would want to make it fully operational as soon as possible for the benefit of passengers.

But he is cool to the proposal for a negotiated settlement with the NAIA 3 builders, stressing that allegations of corruption and other irregularities in the project could not be ignored.

“To leave it behind, there are so many issues that really have to be settled, among them the compensation for those who have constructed it, and there is a dispute as to what is the right compensation,” Aquino said, stressing that NAIA 3 still needs a lot of repair work.

“We believe that we were overpriced in the construction,” the President said.

“The end point is we are looking forward to resolving all of these issues but in a legal manner and consistent with our fight against alleged corruption that was attended to in the construction,” he said.

NAIA 3 opening will push through

Meanwhile, Secretary De Jesus said their ongoing effort to open NAIA 3 was not affected in any way by the ICSID’s recent decision.

He said according to their lawyers, the ruling does not impede the current efforts to open the terminal to full international and domestic operations by both local and foreign carriers.

“Up to this point, we’re proceeding as we have planned. We are going ahead with discussions with the contractor with respect to the completion of the terminal. We will continue,” De Jesus told The STAR.

Currently, the NAIA Terminal 3 is being partially operated, mainly serving the domestic and international flights of local budget carriers Cebu Pacific Airways, PAL Express and Air Phil Express.

De Jesus said the Department of Transportation and Communications’ (DOTC) plan is to finally open the terminal to full commercial operations by the end of 2011.

“If there are no legal interruptions, disturbances, we aim to finish that by the end of this year,” he said.

De Jesus had earlier revealed that they were talking to Japanese firm Takenaka Corp., the primary sub-contractor of Piatco that bagged the NAIA 3 build-operate-transfer (BOT) contract, to complete the unfinished portion of the terminal.

The Supreme Court had nullified the BOT contract of Piatco after finding that the amendments were highly disadvantageous to the government.

The DOTC’s announcement to have Takenaka back has raised eyebrows among Manila International Airport Authority (MIAA) officials, who see the move as ill-advised considering their previous experience with the Japanese firm.

In 2007, a portion of the ceiling of the terminal collapsed, stopping efforts of the MIAA to hold a soft opening of the NAIA 3 that year. The MIAA, under then general manager Alfonso Cusi, terminated Takenaka’s contract in early 2008 after its civil works plan was found to be below standard.

MIAA sources stressed that the decision of Cusi and MIAA officials to boot out Takenaka was justified, considering its track record. – Rainier Allan Ronda


President Aquino is cool to the proposal for a negotiated settlement with the builders of the Ninoy Aquino International Airport Terminal 3 (NAIA 3), stressing that allegations of corruption and other irregularities in the project could not be ignored.

“To leave it behind, there are so many issues that really have to be settled, among them the compensation for those who have constructed it, and there is a dispute as to what is the right compensation,” Aquino said.

He stressed that NAIA 3 still needs a lot of repair work.

“We believe that we were overpriced in the construction,” Aquino said.

“The end point is we are looking forward to resolving all of these issues but in a legal manner and consistent with our fight against alleged corruption that was attended to in the construction,” he said.

Aquino said he is committed to find a resolution to the NAIA 3 case and would want to make it operational as soon as possible to the benefit of the passengers that would be utilizing the airport.

“And there is a sense of overloading of some of our current facilities in NAIA,” Aquino also pointed out.

The Philippine International Air Terminals Co. is the consortium that built the NAIA 3 with German firm, Fraport AG as one of the investors. But Fraport was accused of violating the anti-dummy law to be able to bag the project.

German Ambassador Christian-Ludwig Weber-Lortsch called for new negotiations to finally solve the ownership dispute over the terminal after the Washington-based International Centre for Settlement of Investment Disputes (ICSID) of the World Bank ruled that Fraport could again file a case against the Philippine government to seek compensation.

In August 2007, the ICSID had ruled that Fraport could not ask for any compensation due to violation of laws in doing business in the Philippines.

“There have been a lot of dialogues between members of our administration and the German ambassador,” Aquino told reporters after the blessing and naming of two bulk carriers built by Korean shipbuilder Hanjin Heavy Industries and Construction Co.-Philippines.

He stressed that there are many issues that should be settled, including the issue of right compensation to the builders.

Earlier, Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang said the issue should be resolved in favor of the Philippines and not of the German government.



The third terminal of the airport, Terminal 3 or NAIA-3, is the newest and biggest terminal in the NAIA complex, wherein construction started in 1997. It was one of the most controversial projects the Philippine government has become involved with.

Legal battles and red tape, especially international cases in both the United States and Singapore as a result of mismanagement of the project by the Arroyo government, as well as technical and safety concerns, delayed the opening several times. The terminal officially opened to selected domestic flights from 22 July 2008 (initially Cebu Pacific only, then Philippine Airlines' subsidiaries Air Philippines and PAL Express), with Cebu Pacific international flights using it from August 1, 2008. All international operations, except for those from PAL, are intended to operate from Terminal 3 in the future, originally proposed to move in fourth quarter of 2009, however international operations from all airlines except Cebu Pacific still operate from Terminal 1.

Terminal 1 Check Hall The NAIA Centennial
 Departure hall of Terminal 3 View from Terminal
Boarding Areas

History Of NAIA 3

The original proposal for the construction of a third terminal was proposed by Asia's Emerging Dragon Corporation (AEDP). AEDP eventually lost the bid to PairCargo and its partner Fraport AG of Germany, who went on to begin construction of the terminal under the administration of Joseph Estrada.

Terminal 3 was approved for construction in 1997 and the structure was mostly completed several years ago and was originally scheduled to open in 2002. The ultra-modern US$640 million, 189,000 square meter facility was designed by Skidmore, Owings and Merrill (SOM) to have a capacity of 13 million passengers per year.

However, a legal dispute between the government of the Philippines and the project's main contractor, Philippine International Air Terminals Co. Inc. (PIATCO), over the Build-Operate-Transfer (BOT) contract, delayed the final completion and opening of the terminal.

While the original agreement was one in which PairCargo and Fraport AG would operate the airport for several years after its construction, followed by a handing over of the terminal to the Philippine Government, the government offered to buy out Fraport AG for $400 million, to which Fraport agreed. However, before the terminal could be fully completed, President Gloria Macapagal-Arroyo, called the contract "onerous" formed a committee to evaluate the agreement to buy out Fraport AG. It is this action that sparked the most controversy. The Philippine Supreme Court eventually found the PIATCO contract "null and void" citing a variety of anomalies.

The administration of President Gloria Macapagal-Arroyo eventually abrogated PIATCO's BOT Contract for allegedly having been anomalous in certain important respects. In a subsequent decision, the Philippine Supreme Court upheld the Philippine Government's position on the matter and declared the BOT contract "null and void" for, among other things, violations of certain provisions of the BOT law. More specifically, the Court found that the original contract was revised to allow for a Philippine Government guarantee of PIATCO's obligations to its creditors, contractors and suppliers. The BOT law disallows the granting of such sovereign guarantees. PIATCO disagrees and continues to maintain that the provisions cited by the Supreme Court do not amount to a prohibited sovereign guarantee by the Philippine Government.                                                                                       

In December 2004, the Philippine Government expropriated the terminal project from PIATCO through an order of the Pasay City Regional Trial Court (RTC). However, the court only allowed the Philippine Government to take over the terminal upon payment of an initial amount of PHP3 billion (approx. USD64 million) to PIATCO. The Philippine Government formally paid PIATCO the said amount on the second week of September 2006.

According to the Philippine Government, NAIA-3 was 98% complete (prior in 2006) and required at least an additional USD6 million to complete. The government was then in the process of negotiating a contract with the builder of the terminal, Takenaka of Japan, because another factor that delayed the terminal's opening was the ongoing investigation into the collapse of a 100 sqm. area of the terminal's ceiling.

PIATCO (and its German partner Fraport) have instituted arbitration proceedings before different international bodies (Piatco in Singapore before the ICC and Fraport in Washington D.C. before the ICSID) to recover a fair settlement. The case filed in Washington was decided in favor of the Philippine Government while the case in Singapore continues to be under litigation. PIATCO, speaking through its lawyers, has stated in the local Philippine press that it remains open to reaching an amicable settlement with the Philippine Government.

By Executive Order No. 732, the NAIA Terminal 3 Task Force was made and Michael Defensor was appointed on June 19, 2008 as head, creating the Presidential Task Force on the NAIA-3 that was "mandated to ensure the immediate opening and operation of Terminal III." The order provides for the NAIA-3 opening based on decisions of the Supreme Court and applicable laws.[13]

Terminal 3 began partial operations at 0515 on July 22, 2008 with 16 inbound and outbound domestic flights from Cebu Pacific. Philippine Airlines' budget brand PAL Express and Air Philippines moved their operations to this terminal two days later.[14]

Cebu Pacific moved all of its domestic and international operations to the terminal on August 1, 2008.

On August 1, 2010, President Noynoy Aquino has announced plans to utilize Terminal 3 to its maximum capacity by Christmas Season 2010, which may mean moving international flights to Terminal 3, but plans are not fully specified at this time.[15]

StructureTerminal 3 is built on a 63.5-hectare lot that sits on Villamor Air Base at NAIA (photo at right). The terminal building has a total floor area of 182,500 m², having a total length of 1.2 kilometers. A four-level shopping mall connects the terminal and parking buildings. The parking building has a capacity of 2,000 cars while the outdoor parking area has a capacity of 1,200 cars. The terminal is capable of servicing 33,000 passengers daily at peak or 6,000 passengers per hour.

Its apron area has a size of 147,400 m², 34 air bridges, 20 contact gates with the ability of servicing 28 planes at any given time. The terminal has 70 flight information terminals, 314 display monitors, with 300 kilometers of fiber optic I.T. cabling. It also has 29 restroom blocks. The departure area has five entrances all equipped with X-ray machines with the final security check having 18 X-ray machines. Its baggage claim has 7 large baggage carousels, each with its own flight display monitor.

Domestic Terminal


This terminal is host to all domestic flights within the Philippines that are operated by Zest Air and South East Asian Airlines. There are no jet bridges and passengers walk to and from the aircraft or are occasionally bussed. Twenty-six Check-in counters are located in the Terminal, the arrival terminal has the seating capacity for 969 people at a time. Several food stores and a book and magazine stall are also available. Five baggage carousels are located in the terminal whilst Domestic airline offices, banks, restaurants and a grocery store are also located right beside the Domestic passenger terminal. The Domestic Terminal on the old Airport Road was built in 1948 and is located near the north end of Runway 13/31. An old hangar has since been annexed to the terminal. [FROM WIKIPEDIA]


Philippines Domestic Air Transportation

Transfer at Manila (NAIA)

Manila Airport (MNL) is rather a national than an international hub. Except those passengers heading to Luzon or downtown Manila, everybody needs a connecting flight to the Island of destination.

There are 3 (three) other terminals within Manila NAIA that deserve domestic routes: NAIA-2 is reserved to Philippines Airlines and Air Philippines; Domestic hosts South East Asian Airlines SEAIR and the newly created ZestAir and the new Terminal-3 used by Cebu Pacific Air, PALexpress and Air Philippines.

Philippines Domestic Air Transportation Air fares in the Philippines are cheap. In November 2007 CEBU PACIFIC started an action, giving away 10,000 tickets for 1 (yes one!) peso. They say, that every pinoy should fly at least once in his life. The fares for hops between the islands are from 350 to 4000 peso depending on the season, on the airline and the route. South East Asian Airlines (SEAIR) are rather expensive, but they deserve small and very small islands. In 2007 SEAIR was the only company to deserve the small island of Camiguin. But be warned: the fares displayed are only a part of the price you pay.

There are multiple taxes and fees. We recommend to multiply the displayed price by two. And there are always the terminal fees for departing travellers. They are usually modest for domestic terminals, from PHP 20.00 in the province up to PHP 200.00 in Manila and Cebu.

Domestic Airlines deserving the Philippines Islands


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