Yasay said the officials whom the President had tasked to resolve the Terminal 3 controversy and to operate the facility as soon as possible have done nothing except to prejudice government’s interests in favor of the claims of the controlling stakeholders of PIATCO led by the Cheng Yong group.
In a press conference at the Century Park Hotel yesterday, Yasay reiterated that government stands to lose more than $1 billion to PIATCO and its German partner Fraport AG in two separate arbitration cases the two entities filed before the International Court for the Settlement of Investment Disputes (ICSID) of the World Bank in Washington DC, and the International Chamber of Commerce (ICC) in Singapore.
PIATCO has asked the ICC to uphold the legality of its build-operate-transfer (BOT) contract with the government to build the NAIA Terminal 3 and has sought just compensation of $565 million if its contract will be voided while Fraport AG has sought damages of $425 million before ICSID from the Philippine government for its failure to protect its interests in PIATCO despite a bilateral treaty between the Philippines and Germany promising mutual protection of investments.
"With the government’s continued anomalous expropriation of NAIA Terminal 3, the Philippine government will surely lose in the two cases and this would mean that Filipino taxpayers would have in pay the damages totally more than $1 billion or P50 billion," Yasay said.
"Expropriation, which unlawfully concedes ownership of Terminal 3 to the builder, has weakened government’s defenses against the claim of Fraport and PIATCO, as can be readily seen from the recent order of an Arbitration tribunal of the ICC in Singapore requiring the Philippine government to turn over possession of Terminal 3 to PIATCO. It exposes government to potential losses of more than $1 billion for a structure whose actual cost can be less than $200 million," Yasay added.
Yasay explained that in expropriating NAIA Terminal 3, government has conceded ownership of the terminal when it is fact owns the terminal by virtue of its ownership of the land where PIATCO built the terminal.
He said that the Civil Code of the Philippines provides that anything that is built on an individual or entity’s land is owned by that individual or entity.
Following this principle, Yasay said that government should just file an ejectment case against PIATCO to gain possession of the NAIA Terminal 3 and just give the consortium the opportunity to get reimbursement of the costs it incurred in building the facility by filing a claim before the lower courts.
"We wish to remind the President that the NAIA IPT 3 is a BOT project that must be paid for by private funds. Government cannot spend for or guarantee its construction or acquisition without seriously violating the law," Yasay stressed.