Renegotiate NAIA 3 deal, senators urge

Senators batted yesterday for the renegotiation, instead of outright rescinding, of the contract between the government and the Philippine International Air Terminals Co. (Piatco) for the construction of the controversial Ninoy Aquino International Airport (NAIA) Terminal 3.

Senators Joker Arroyo and Edgardo Angara said that a renegotiation was needed for the $650-million project to enable the government to get the best terms and amend major provisions that need improvement.

Arroyo, chairman of the Senate Blue Ribbon Committee, made this proposal after the panel started its public hearings yesterday on the NAIA 3 project, with Piatco officials defending it and the Manila Airport Services Operations (Maso) seeking to rescind it.

"It is for the good of all that we renegotiate this contract," Arroyo said.

Angara, who filed the resolution calling for investigation of the controversial airport project along with Senate Majority Leader Loren Legarda and Sen. Ramon Magsaysay, agreed it is to the government’s interest to renegotiate for better terms.

Sen. Sergio Osmeña III indicated willingness to support renegotiations with Piatco, but he insisted that the government must move to "rescind the Arca provisions on government guarantee."

According to Osmeña, the Amended and Restated Concession Agreement (ARCA) changed the whole contract terms.

"We should go back to the original agreement. Piatco can stay but they should stick to the original agreement," he added.

"We should be practical. Since it (NAIA Terminal 3) is 97 percent completed, we should let it open but we should also renegotiate for better terms," Angara, who is with the opposition, said. "A renegotiation is legally tenable and I think that the government ought to take that position."

Moises Tolentino, Piatco vice president for internal affairs, told Senate reporters that the Terminal 3 project will open on Nov. 26, as the main financier, Fraport AG, continued to pour funds into the project.

There were earlier reports that Fraport had stopped funding the project after delays and controversies had hounded it, but Tolentino denied this.

He also said that they are open to renegotiations but the government should at least present reasonable terms.

"We are open to the renegotiation. We are not unreasonable," he said.

Angara cited a provision in the ARCA which the critics of the project claims gave "virtual sovereign guarantee" to the operator, as one that needs amending.

Arroyo, Angara, Osmeña and Sen. Rodolfo Biazon noted that Piatco’s unsolicited build-operate-transfer project for the NAIA Terminal 3 is not qualified to avail of government guarantee as this would be in violation of the Build-Operate-Transfer law.

"But we want the government to present the terms that are reasonable for both parties," Tolentino said, when senators endorsed a renegotiation of the Piatco contract.

However, he admitted that renegotiation would be difficult insofar as the financial aspect of the contract is concerned because they are already obligated to their creditors.