Piatco lawyers admit project not bankable

Lawyers of the Philippine International Air Terminals Co. Inc. have themselves admitted that Piatco, on its own, was not financially capable of building NAIA Terminal 3 and that the project would not get any loans unless a government guarantee, which is prohibited by the BOT Law, was given.

In a motion for reconsideration filed last Friday by its lawyers, Piatco informed the Supreme Court that its foreign lenders "found the concession agreement non-bankable."

"It was thus necessary to amend and clarify in subsequent supplements certain provisions of the concession agreement to facilitate project financing as envisaged in the bid documents and to insure the success of the project," it said.

Piatco’s admission was pointed out by Atty. Jose Bernas who will sue shortly the top officials of Fraport of Germany and Piatco for criminal monopoly, a crime both here and in Europe. Bernas was the lawyer for a group of congressmen that succeeded in having the Piatco’s contract declared void by the Supreme Court because of Piatco’s lack of financial capability.

Bernas said even in oral arguments before the high court decided on the validity of the contract, Piatco legal counsel Eduardo de los Angeles admitted that Piatco would not be able to secure foreign loans without revising its original contract with the government.

To please these foreign lenders, Piatco had its contract amended several times. The court said the changes meant making the government guarantee the loans in violation of the BOT Law.

De los Angeles said that "theoretically," Piatco could stick to the original terms of its contract. Doing so, however, would mean Piatco would fund the project on its own. The Supreme Court said in its ruling Piatco’s predecessor should not have been pre-qualified in the first place for lack of financial capability.

De los Angeles said in his oral arguments that a $30-million loan from the Asian Development Bank and German investment bank kfW was tied to the "amended and restated concession agreement" (ARCA) between Piatco and the government.

Bernas said he would sue the Fraport and Piatco officials for conspiracy to monopolize the services at the airport terminals. Under the contract, even the commercial operation of other passenger terminals throughout Luzon would be held back or stopped altogether so Terminal 3 would have no competition.