Phl to abide by rulings on Fraport, lake project

BERLIN – The Philippines will abide by whatever ruling is issued by the courts on the scrapped Laguna Lake rehabilitation project of a Belgian company and the Ninoy Aquino International Airport Terminal 3 of German firm Fraport AG, President Aquino said here yesterday.

The President said Belgian Prime Minister Elio Di Rupo mentioned the Laguna Lake project in passing when they met in Brussels on Sept. 16, while the Fraport AG case was also tackled briefly during his meeting with German Chancellor Angela Merkel.

Aquino has been assuring European investors in his many meetings with them that reforms have made doing business in the Philippines easier and that no one is “untouchable” in the fight against corruption.

He said that from cutting bureaucratic red tape to sending a former president to jail to ousting an ombudsman and a Supreme Court chief justice, breakthroughs achieved in the fight against corruption have ensured transparency and a level playing field for investors.

“It’s almost said in passing. So we said this is at the arbitration and we will, you know, we are bound by the result of the arbitration,” Aquino told reporters in a briefing Friday night (early yesterday morning in Manila).

“But we explained to the Prime Minister the main contention: there is an P18.7-billion project and, basically, it will remove silt from one portion of the lake and move it to another portion of the lake. So if the objective is to increase the water holding capacity of the lake, matter occupying space will not,” Aquino said.

The President said there was no “accusatory tone” in the Philippine position and “there was no belligerence.”

“So I think they were able to say it, we were able to respond appropriately without causing any tension and conflict,” he said.

The Philippine government is gearing up for arbitration of the P6-billion lawsuit that a Belgian firm, Baagerwerken Decloedt en Zoon N.V., filed against the country before the International Center for Settlement of Investment Disputes (ICSID) in Washington over the scrapped Laguna Lake Rehabilitation Project, with 22 Filipino officials as potential witnesses.

The P18.7-billion project was unilaterally scrapped in 2010 after the Aquino administration identified it as a “midnight deal” of the previous administration. The Belgian company sued Manila for breach of contract.

On the Fraport issue, Aquino explained that the courts would have to determine just compensation for parties involved. “And I reiterated that whatever the court would tell us and whatever the arbitration would tell us, we would abide by that,” Aquino said.

Earlier, Germany expressed hope that the transfer of five foreign airlines to the NAIA Terminal 3 would speed up the settlement of the legal dispute between the Philippine government and Fraport AG.

“It’s a good window of opportunity… Once they do this step, it might also be a good idea to come to a settlement,” German Ambassador Thomas Ossowski said. “Everyone should now be interested to come to a settlement.”

Ossowski said bilateral economic and trade ties between the Philippines and Germany had improved and German investors were satisfied with the reforms implemented by the Aquino administration to make the Philippines more business-friendly.

“We have moved a good way forward but more needs to be done,” he said.

Among the things that must be settled, he said, was the dispute with Fraport, which European officials said scared away investors.

The courts will determine the exact amount of compensation the Philippine government should pay Fraport and the Philippine International Air Terminals Inc. since the terminal building was almost complete before the project was scuttled a decade ago due to allegations of corruption.

Fraport lost the arbitration case before ICSID in 2007. The Washington-based court favored the Philippine government, saying Fraport and its Filipino partner, PIATCO, violated the Anti-Dummy Law.