Foreign investors air concern over delay in implementation of NAIA 3 project

Foreign investors involved in the proposed development of the $500-million Ninoy Aquino International Airport Terminal 3 (NAIA 3) have expressed concern that the ongoing controversy over the project would ultimately lead to its collapse and affect other pending airport development projects.

Sources from diplomatic circles and the community of foreign businessmen in the country disclosed that NAIA 3 investors, creditors and even contractors were getting restless over the delays in the implementation of the project that was supposed to go into full swing this year.

Speaking on condition of anonymity, a top official of a foreign company told The STAR that the controversy is eroding the credibility of the government.

According to the official, foreign investors involved in the project were concerned because the NAIA 3 development project has not moved since the groundbreaking ceremonies during the Estrada administration.

The new terminal is being built by German and Southeast Asian investors led by the Flughafen Frankfurt/Main AG consortium on a 65-hectare plot at Villamor Air Base. When completed, NAIA 3 will be three times the size of the existing airport which can accommodate only about five million passengers a year.

The future Terminal 3 will become the first major airport in the Asia-Pacific rim built under the build-operate-transfer (BOT) scheme and will replace the existing airport which has already been condemned as beyond repair because of age.

The new terminal is being built by the Philippine International Air Terminals Company, Inc. (PIATCO), a consortium of Filipino, German, Japanese and Singaporean investors led by Flughafen Frankfurt/Main AG consortium.

For the participants in the project, the official said the biggest concern was the inability of the projects to move on, adding that this would have an impact on other pending airport projects.

The official said foreign businessmen, especially those already in the country, continue to be optimistic about the prospects of economic recovery and growth but unnecessary delays in the projects that should have gotten off the ground could erode this confidence.

At present, about $150 million has already been invested in the NAIA 3 project and government has already paid commitment fees for funds that have not been utilized while the project is being held back by the controversy over PIATCO’s BOT contract.

"We are not to say that the government made a good or a bad decision. The point is that there is already a decision and should already be implemented," the official said.

Plans for Terminal 3 started during the Ramos administration after the five million annual passenger design capacity of Terminal 1 was breached as early as 1993. Last year’s groundbreaking was not even the first for Terminal 3, since the first one took place in 1994 with Asia’s Emerging Dragon (AED) as the supposed builders. The consortium was composed of six business tycoons.

AED won the initial bidding to build and operate the airport with an offer to give a P5-million annual compensation to the Manila International Airport Authority. However, immediately after the ground breaking, PIATCO offered to give a P150- million annual compensation to the MIAA, forcing the management to reevaluate its decision.

Following a lengthy court battle between the two groups, PIATCO won the contract and the Arroyo administration had repeatedly stated that it would honor it.