Legal battle over NAIA-3 takes center stage in 2006 for DOTC

A vicious legal battle tells much about the pitfalls of forcing upon the public a graft-ridden multi-billion peso project: the Ninoy Aquino International Airport Terminal 3.

Months after its scheduled opening, NAIA-3 remains idle and seemingly wasting away after being the subject of a long-drawn legal wrangling over its ownership.

The controversy seemed to have clouded other major developments in the transport sector including the acquisition of new 3-G trains for Metro Manila’s light rail transit system.

It might take long before a cynical public will accept the pronouncements by Transportation Secretary Leandro Mendoza that the mothballed NAIA-3 may finally begin operating in the first quarter of this year. Asked about the exact date of NAIA-3 opening, officials couldn’t tell.

The Arroyo administration’s announcement early last year of the terminal’s opening drew cheers and criticisms from various quarters. The country’s need for a modern and bigger airport facility is indisputable, but critics say legal questions regarding the airport contract may have to be settled first.

The government fired the first salvo in the legal battle over NAIA-3 when it took over the facility on Dec. 21, 2004 after the Supreme Court declared the contract with its builder, Philippine International Air Terminals Co. Inc., as null and void. The SC said the awarding of the contract to Piatco was violative of bidding rules and the build-operate-transfer (BOT) law. The Piatco consortium includes the German company Fraport AG.

The SC also directed the government to initially compensate Piatco for P3 billion first before operating NAIA-3. The balance, to be paid within a certain period of time, would be determined after an audit of the airport facility by court-appointed experts. One of the members of the Piatco consortium, Takenaka Corp. of Japan, had also been tapped to finish work on NAIA-3.

This was questioned by Piatco legal counsel Liwayway Vinzons-Chato who insisted that Takenaka was still bound by its contract with Piatco and that it had no right to deal separately with the government. Chato said Piatco would sue Takenaka if it continued its deal with the government.

The controversy deepened when the Lucio Tan-led Asia’s Emerging Dragon Corp., a losing bidder in the airport contract, moved to wrest the NAIA-3 project from the government, saying its expropriation of the facility from Piatco was illegal. AEDC spokesman Perfecto Yasay Jr. said the airport project should have been awarded to AEDC after the SC nullified the contract with Piatco.

A comic twist to NAIA-3’s saga was the collapse of a large part of the terminal’s ceiling on March 27 last year, or four days before the "soft opening" of the facility.

The incident prompted Manila International Airport Authority General Manager Alfonso Cusi to cancel the "soft launch" of the terminal. Cebu Pacific also had to stop its operations at the terminal. Cusi said authorities had to cancel the event until they were sure of the structural integrity of the whole terminal complex. Cusi said Takenaka had been asked to explain the damage which covered 80 to 100 square meters of the ceiling. An earlier schedule of NAIA-3 opening was June 21, 2005.

Train system

Another major development in the transport sector was the government’s purchase of 3-G trains for the Light Rail Transit Authority (LRTA). The acquisition of new trains is seen to greatly help smoothen traffic flow in Metro Manila.

President Arroyo and Japanese Prime Minister Shinzo Abe inaugurated last Dec. 9 the 3-G trains. The event marked a new phase in the government’s program to provide fast, safe and efficient transportation in Metro Manila, said LRTA Administrator Melquiades Robles.

The new set of 12 four-car trains will augment LRTA’s existing 63 "first generation" and 28  "second generation" trains.

Robles said that Japan has been helping fund major LRTA projects since 1993. The latest funding program is CAPEX.

The CAPEX is funded by an P8.893 billion loan under the first stage of the Obuchi Fund. The loan is payable in 30 years at a concessional interest rate of one percent per annum.

Composed of two packages, Package A of the loan involves the acquisition of 12 four-car trains and related system and civil works, including the major renovations at the EDSA and Doroteo Jose stations, which links the Line 1 system of the MRT Line 3 and LRT Line 2 systems, respectively.

Package A also involves the installation of escalators and elevators and a cross-over bridge at the Doroteo Jose station, improvements in other stations to resolve the perennial queue of passengers at the ticket booth, gates and access ways, and the construction of a modern Operations Control Center at the depot area to centralize control operation in the Line 1 system.

On the other hand, Package B, which is already complete, involves the installation of air-conditioning units for the old fleet.

Robles said the CAPEX project was in preparation for the construction of the North Line linking LRT Line 1 Monumento Station to Metrostar Express in North EDSA station and South Line extensions from Baclaran station to Bacoor, Cavite.

The Metro Rail Transit Authority (MRTA) headed by General Manager Roberto Lastimoso would also be purchasing additional trains.

The MRTA is planning to buy 48 cars for about US$48 million for its expansion project starting next year.

Lastimoso said MRTA’s immediate plan is to acquire 48 second-hand cars and convert these into 12 four-car trains. A car would cost about US$1 million, including the refurbishment, conversion, as well as delivery to the Philippines.

"The immediate plan is the acquisition of more rolling stock because our system is now bursting to the seams. It is only designed for 350,000 (passengers) maximum capacity (per day)," Lastimoso said.

"It is now carrying an average of 450,000 (passengers), which is 100,000 more than we can carry (per day). So we are buying more vehicles for stock, and because the need is immediate, we have shopped, and looked around in Germany and Austria," Lastimoso said.

Lastimoso said he recommended that the first set of a four-car train be delivered by April or May 2007. He said MRTA had received offers from Dusseldorf and Hanover in Germany, and from Vienna, Austria.

He said a new car would cost about US$2.5 to US$3 million. Once refurbished, he said, these can still be used for 25 to 30 more years, which is the lifespan of a refurbished car.

A used car will only cost the Philippine government about US$250,000 to US$300,000. "The refurbishment would cost us a lot since you have to do a lot of things like cut the roof to install the airconditioning. You have to reconfigure the cables, the electrical, the doors, and the seating arrangement," Lastimoso said.

The DOTC and its agencies also underwent a major reorganization with the promotion of the two of its top agency heads, former Land Transportation and Franchising Regulatory Board Chairperson Ma. Elena Bautista and former Land Transportation Office chief Assistant Secretary Anneli Lontoc.

President Arroyo appointed retired police general Thompson Lantion as chairman of the LTFRB replacing Bautista.

Bautista was named DOTC Undersecretary for Water and Maritime concerns and administrator of the Martime Industry Authority replacing Vicente Suazon Jr.

Lantion is also the spokesman for DOTC’s Mendoza, his batchmate in the Philippine Military Academy (PMA) class 1969.

Lontoc, on the other hand, was appointed DOTC Undersecretary for Road Transport, replacing then Undersecretary Ricardo Alfonso who resigned.

Capping the year for the transport sector was the "provisional reduction" in jeepney and bus fares.

The minimum fare for jeepneys dropped from P7.50 to P7. For ordinary buses, the fare was slashed from P8 to P7.50 and for aircon buses, from P10 to P9.50. The fare cut was prompted by the large drop in the price of crude in the international market.