House rejects P20 B for Piatco

MANILA, Philippines - The House of Representatives has rejected a Senate proposal to set aside P20 billion in the proposed P3.002-trillion 2016 national budget for payment to Philippine International Air Terminals Co. Inc. (Piatco), builder of the Ninoy Aquino International Airport Terminal 3.

The senators’ proposal was included in their version of next year’s budget, which the two chambers of Congress are set to finally approve this week.

However, when the House and Senate versions were sent to a conference committee for reconciliation last week, the House conferees rejected the appropriation for Piatco despite insistent appeals from their Senate counterparts.

Davao City Rep. Isidro Ungab, House appropriations committee chairman, and his Senate counterpart, Loren Legarda, were the joint chairpersons of the conference panel.

Reached for comment yesterday, Ungab confirmed that his contingent stood pat in scrapping the huge allocation for Piatco.

“First, there is yet no final Supreme Court decision on the monetary award to Piatco. Second, we cannot discuss in the conference committee anything that was not tackled by the House, where the budget originates,” he said.

Another House conferee, who did not want to be identified, wondered why senators “were apparently in a rush to pay Piatco.”

“They even argued at length during the budget conference for the proposed allocation,” the source said.

Last Sept. 8, the Supreme Court ordered the government to pay Piatco $510 million (about P24 billion) for Terminal 3, which the state took over in 2004, citing breach of contract and corruption issues.

The huge amount included $327 million in replacement cost and $243 million in interest. The SC deducted $59.4 million the government paid Piatco in September 2006.

The high court modified the decision of the Court of Appeals setting the amount of compensation to the builder at $371 million. In May 2011, a Pasay City regional trial court ordered the government to pay Piatco $116.35 million, excluding interest.

The government has appealed the SC decision on the huge compensation award to Piatco.

In a motion for reconsideration, Solicitor General Florin Hilbay said Piatco should get only $104.5 million, not $510 million.

He reminded the high court that it has declared that Piatco was not a qualified bidder and that the tribunal even cancelled Piatco’s contract.

He said taxpayers should pay only the following: $300,206,693.00 (in base construction cost as of December 2004), less $1,738,318.00 (deterioration), $35,076,295.00 (depreciation) and $113,944,044.00 (rectification for contract compliance, additional areas to be built), or the net sum of $149,448, 037.00.

“Applying the inflation rate of 1.0971, the total just compensation payable to Piatco is $163,959,441.39, less the proffered value of $59,438,604.00, or $104,520,847.39,” Hilbay said.

The government asked the Supreme Court to scrap the $243 million in interest it has given Piatco.