Government panel may suggest nullifying Piatco deal

A government panel of legal experts is inclined to declare null and void the government’s contract with Philippine International Air Terminals Co. Inc. (Piatco), which built the Ninoy Aquino International Airport passenger terminal 3 (NAIA-3).

A member of the panel, requesting anonymity, told The STAR yesterday there was a "consensus" among the government’s legal experts that the Piatco contract is full of legal defects that led to the project cost swelling to as much as $600 million, from the original cost of $400 million.

One of the added provisions in the contract, the source said, is the expense related to public relations costs, the bulk of which went to Alfredo Liongson.

The source said that the legal experts came from the Department of Justice (DOJ) and its attached agencies, the Office of the Solicitor General (OSG), and the Office of the Government Corporate Council (OGCC).

The OSG, headed by Solicitor General Alfredo Benipayo, earlier filed a petition with the Supreme Court to declare invalid certain provisions of the Piatco contract, in particular one amendment entered during the administration of deposed President Joseph Estrada.

"(President Arroyo) is likely to adopt a strong stance on the (anomalies) and uphold the position of the OSG on this," the source said, noting that "a decision has already been made but the finer legal points are just being finalized."

The President earlier affirmed a recommendation made by a team of Malacañang senior officials to postpone the opening of NAIA-3 from Dec. 15 to the first quarter of 2003 based on security considerations raised by Transportation and Communications Secretary Leandro Mendoza.

The team, chaired by Executive Secretary Alberto Romulo, includes chief presidential legal counsel Avelino Cruz, Presidential Management Staff secretary Silvestre Afable and presidential chief of staff Rigoberto Tiglao.

The government is prepared "to take over" Piatco’s contract "if necessary" to ensure the "smooth and safe" opening of NAIA-3, a Malacañang official said yesterday.

The possible government takeover is one of the options being considered if the Cheong group, the local partners of Fraport AG of Germany, continues to "fool around" and make it difficult for the government to help resolve the "corporate squabble" among them, a high-ranking Palace official told The STAR.

Fraport AG is a major stakeholder of the NAIA-3 project.

The looming takeover, the sources said, will take off from initial negotiations done by presidential adviser on strategic projects Gloria Tan-Climaco with Fraport AG on the proposed $400-million buy-in sale, with no cash out from the government.

Meanwhile, the House committee on transportation is calling all agencies involved in the NAIA-3 project so they could push for its early opening.

The committee, chaired by Rep. Jacinto Paras, announced their decision yesterday, shortly after touring the $600 million international passenger terminal and found all its equipment and facilities conformed to international standards.

"We will call all agencies involved in the decision to open NAIA-3 so that we can push for its early opening by at least January next year," said Paras after conducting a hearing at the terminal facility. He was accompanied by 22 committee members.

Paras said the committee decided to hold the hearing on NAIA-3 due to the urgency of the issues involved, which led to the postponement of its scheduled Dec. 15 "soft opening."

Rep. Prospero Nograles, on the other hand, noted during the hearing that government officials move heaven and earth to have government projects opened even if these are half-finished, while putting obstacles in the way of privately funded projects to stop their opening.

Nograles also said he cannot understand why, despite the sophisticated security equipment set in place at the new terminal, the facility could not be opened while the equipment at NAIA-1 terminal keep breaking down.