Gov’t will pay if Piatco doesn’t open NAIA-3

Now he’s talking. Gerry Cunanan, Piatco’s new general manager for NAIA-3, says the airport terminal may not open after all on Dec. 15 as the government suggested. International carriers need more time to move from NAIA-1, he shrugs. Philippine Airlines has no intention either of leaving NAIA-2, where it conveniently links domestic with international flights.

The admission follows weeks of baring fangs by Piatco spokesmen.

They had snarled at presidential adviser Gloria Tan Climaco for doubting Piatco’s earlier target inaugural of Nov. 26. They also growled that Piatco could declare government in default if it failed to help launch the disputed terminal once construction is completed.

Now it turns out that civil works won’t be finished by either dates. An airline normally takes five months to erect check-in counters, test computers and dry-run flights. Not one airline has yet signified plans to relocate. Besides, there’s the tiff about who should pave an access road from the present cargo terminal to NAIA-3. The original contract was for Piatco to dig a tunnel. Somehow the proviso was erased and the burden of paving on ground level was passed to the government, which then spent hundred-millions to tear down Nayong Pilipino and terminate workers.

There’s also the matter of collapsing a new cargo terminal that Piatco built where a waste-water treatment plant should be. The facility was not in the blueprint, but Piatco went on and built it anyway, thus raising suspicion that the controlling Cheng family wanted to monopolize cargo operations.

Cunanan’s backtrack notwithstanding, the threat of default hangs over government. Climaco precisely had argued that the Piatco contract was void from the start because it did not abide by the terms of the 1997 bidding. Since then, the contract was amended, restated, supplemented. It now has an insertion of state guarantee for all of Piatco’s loans, which goes against the Build-Operate-Transfer Law under which Piatco bagged it. A new proviso would cut short existing food catering, aircraft cleaning and other service contracts at NAIA-1 and -2, which could open government to lawsuits. Peskiest perhaps is that government must compel all airlines to move to NAIA-3. But before they do, their governments must first certify the terminal. The US-Federal Aviation Authority has yet to see a shopping mall that Piatco built in lieu of a duty-free store - a security nightmare since it is open to the public and looms beside a runway. Yet another insert was for government to get all NAIA-3’s legal and international clearances, like the environmental permit for the missing treatment plant.

Failing that, Piatco can declare it in default. Government must then reimburse it of all expenses, which Piatco claims to range from $550 million to $657 million to date. Plus pay $50,000 a day until Piatco can open NAIA-3.

One-sided it sure is. Government can be made to account for Piatco’s ruses, while the latter collects for default. A seven-man Cabinet panel that President Gloria Arroyo formed to study the options is thus walking on eggshells. As panel chief, Economic Sec. Dante Canlas at first wanted to renegotiate the onerous items. Advice came from the Office Government Corporate Counsel, which opined that government can employ regulatory powers to whip Piatco into line. But after sensing the threat of default, Canlas had second thoughts. He now wants a bigger legal team from the OGCC, Solicitor General and justice department to take another look.

Will a second opinion declare it void ab initio? As panel member, Climaco has stood pat on that line, confident of the Senate Blue-Ribbon’s backing. Committee head Joker Arroyo has said that the more he learns about the contract, the more he’s convinced of hanky-panky. Opposition leader Edgardo Angara too has stated that if it is flawed, then there’s no contract, much more nothing to renegotiate. Service firms whose NAIA-1 and -2 contracts are in danger of dissolve have taken a parallel route. They’ve asked the courts to rule on the validity of a contract that defies the B-O-T Law. Judging by how litigations go, a ruling won’t be forthcoming soon.

Still another suit for graft was filed as far back as Feb. 9, 2001 by Leto Raul Descallar before the Ombudsman. Impleaded were members of the transport office’s Pre-Qualification, Bid & Award Committee who handled the contract in 1997: Cesar Valbuena, Herminia Castillo, Francisco Atayde, Wilfredo Trinidad and Primitivo Cal. Descallar asserts that the PBAC knowingly ignored bidding rules when it awarded the deal to the Cheng consortium despite major deviations from the terms of reference. Judging by strange happenings at the Ombudman, this suit too has a long way to go.

Descallar found out last July that the office had dismissed the suit without informing him. What shocked him was the reason cited - that he pirportedly had signed an affidavit of desistance. Descallar has since filed another case of forgery and falsification of public documents. He and his lawyer dropped out of sight when mystery callers said they’d sic low-paid, desperate soldiers on them.

Canlas’s panel may have no choice in the end but go for the tack that Climaco saw from the start: take over NAIA-3 since the contract is invalid. The idea was broached by Fraport AG, Piatco’s German partner which holds on paper 40 percent but actually owns 61.44 percent, and pitched in 96 percent of the capital. It also proceeds from the law that allows B-O-T to become B-T-O, build-transfer-operate. With the terminal nearly complete, Fraport is offering government to reimburse it $300 million for the $475 it has spent, plus $100 million to finish the works and buy out the Chengs with whom it had a falling off. Since government has no spare cash, it will lend the money at low interest and three year’s grace period. Within that time, government can bid the operation contract to a firm with international credentials, thus securing the certifications from American and European aviation authorities and possibly cutting short the loan.

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