Fraport case to scare off foreign investors

Foreign investors are expected to shy away from future build-operate-transfer (BOT) projects with the government following the sad experience of Germany’s Fraport AG in the controversial Ninoy Aquino International Airport (NAIA) Terminal 3 project, European Chamber of Commerce of the Philippines executive director Henry Schumacher said yesterday.

"I think the Fraport case would have a direct impact on government’s ability to attract foreign investors to put their money in BOT projects," Schumacher said.

Schumacher warned that "this (Fraport fiasco) is unfortunate considering that the government is largely dependent on foreign capital to implement BOT projects."

The Fraport case, Schumacher pointed out, is just the latest botched BOT project on top of other problems with BOT power projects.

"Foreign proponents in various BOT projects have complained about the government’s whimsical decision to change the terms of the BOT contracts midstream into 25-year projects," he said.

Fraport recently decided to write off its 292 million euros or about P17 billion investment in the NAIA-3 project following the government’s decision to abrogate its contract with the joint venture firm Philippine International Air Terminal Co. Inc. (PIATCO).