MASO tells government not to be beholden to PIATCO

"The government should not allow itself to be held hostage by a private company dangling an onerous and grossly disadvantageous contract over its head," former Securities and Exchange Commission chairman Perfect Yasay Jr. said yesterday.

Yasay, currently chairman of the MIA-NAIA Association of Service Operators Inc. (MASO) was reacting to a warning by a ranking official of the Manila International Airport Authority (MIAA) that the government would be forced to pay P25.780 billion to a Filipino-German firm implementing the controversial NAIA Passenger Terminal 3 project.

Yasay said failure of the project by any reason would place the government in a very untenable situation of having to pay the contractor, Philippine International Airport Terminals Co. Inc. (PIATCO) P180 million in "liquidated damages," in addition to bankrolling all of PIATCO’s obligations arising from its implementation of the project.

"Under an amended contract, the government will have to pay PIATCO $650 million representing total cost of the entire project, P750 million in case of failure to implement it within a set time frame, plus the projected rate of return on its investments," Yasay added.

Yasay reiterated his call to the Arroyo administration to immediately rescind the NAIA Terminal 3 contract "as the only viable option" to a failed renegotiation, under pain of throwing away billions of pesos in people’s money. The government-PIATCO deal stipulates that NAIA Terminal 3 should be operational by November, failure of which could open the floodgates to a host of court cases, notably civil suits against the state.

Yasay said the Arroyo administration should not dilly-dally on the NAIA Terminal 3 fiasco and order the immediate cancellation of the contract from the unlamented administration of deposed President Joseph Estrada. Yasay also noted that since the Cheng family, local partner of the German firm Fraport AG in PIATCO, has taken an adversarial position on the renegotiation of the project, the government can take a fairly legal move of rescinding the contract to protect the interest of the state and the entire Filipino people.