Examining the construction will resolve how much government must reimburse Piatco for the expropriated facility. Should it be anywhere from $412-$560 million that Piatco variously demands, or $40 million that officials are ready to shell out – but only to Takenaka as general contractor? Or should it be zero, given scathing findings in two judicial actions filed no less by Piatco in Singapore and its German partner Fraport in Washington?
Scores of project participants and experts had testified in both proceedings. Most were harmful to Piatco and Fraport. If submitted to the Pasay court, the testimonies can hasten Judge Mupas’s research.
One admission of fault is by Robin Swinnerton, Takenaka’s designer. In a sworn account to the International Center for Settlement of Investment Disputes (Washington), Swinnerton took pains to exculpate his employer. But the narrative of his role in Mar. 2000-Sept. 2002 pointed to design flaws. For starters, Piatco was supposed to submit work drawings to two NAIA advisers, Japan Airport Consultants and Campbell Associates – which it did. JAC and Campbell splattered the plans with 600 critical remarks. Only two months after signing the building contract did Takenaka find out that the drawings Piatco gave it were not the ones the advisers critiqued. Cheng Benito Designs had drawn the plans. Architect Jefferson Cheng is a director of Piatco, the son of its founder.
Another belated Takenaka find was a "Schedule 7". Prepared before Takenaka landed the construction contract, the paper listed Piatco-Fraport’s favored subcontractors and suppliers for each phase, from earthmoving to specialized equipment to finishing. Still, the contract stated that Takenaka must clear all work bids with Piatco-Fraport, who were to have final say in approvals, more so if to be awarded to parties other than those in Schedule 7. Swinnerton said this was "common practice" in large-scale works. But in Terminal-3, he saw it "as having the potential to lead to irregular practices."
Takenaka managers were forced to reveal to Piatco-Fraport the bids of subcontractors and suppliers. "What then happened was a systematic bullying of the potential subcontractors," Swinnerton said. "Piatco would contact them and advise something along the lines of ‘how much are you going to pay us, otherwise you will not be approved as a subcontractor?’ I believe that the target amount was up to 10 percent of the initial bid to Takenaka."
One victim was NKI Asia-Pacific, a global fabrication specialist that was to supply check-in desks and signage works. Not only was it forced to "pay" Piatco a $200,000-advance to secure a $4-million subcontract from Takenaka, but also to partner with Cornersteel Systems, a local furniture maker "whose owners were friends of the Cheng family," Swinnerton said. "Jefferson Cheng was receiving the differential kickbacks."
Maurits Van Linder of Siemens AG did not mince words either about Schedule 7. His company had tied up with Fuji-Haya to handle mechanical-electrical works worth $129 million, two-fifths of Takenaka’s $323-million contract. Siemens-Fuji in turn was to subcontract some of the jobs.
Schedule 7 preferred Crisplant as installer of the baggage handling system. But Siemens found this to be inadequate for peak hours, and thus submitted its own bid. An irate Piatco rejected it, insisting on Crisplant’s smaller chutes and carousels, and directing Siemens to consider the peak hours of "current airport operation." Linder found the order odd for a terminal that is supposed to accommodate increased passenger and flight traffic.
Other unqualified subcontractors and suppliers were forced upon Siemens. Money was the sole objective. "Piatco, Fuji-Haya, Dai-Dan – which (later) took over Fuji-Haya’s scope of the contract – and Takenaka were taking the differential from the ... subcontractors and suppliers, and using (these) to pay bribes to government officials ... as well as kickbacks to the Chengs and others."
Design changes also led to inferior equipment, Linder said. For one, the width of escalators was reduced. While the final width still met specifications, it also reduced the capacity to move people per minute.
Piatco’s own lawsuit before the International Chamber of Commerce (Singapore) opened a can of worms. Airport specialist Richard Francis Klenk testified also on design, construction, and features. Hundreds of serious flaws were seen to compromise safety, environment, structural integrity, and even operability of Terminal-3.
Inspections showed that concrete slabs, beams and aprons have cracked. Beams are deflected. A section of the elevated terminal roadway had collapsed. The fire sprinkler system is inoperative; elevators and escalators are not connected to it. A firefighting unit has been installed, along with carbon dioxide and other gases for giant extinguishers, but with no failsafe mechanism against accidental activation. The sanitation plant is not working; the potable water supply has not been test-run. No emergency lighting is in place to facilitate rescue of people in case of trouble.
Side issues meanwhile have sprung. For one, why did government expropriate in the first place when the Supreme Court had voided Piatco’s build-operate deal for patent anomalies? Asian Emerging Dragons Corp., the original bidder that wants the contract back, has offered $200 million to take over operation, plus another $100 million to cover other government obligations. But with the crash of the ceiling and the testimonies on design flaws, it is backing out. Better to demolish the structure than take over it, the AEDC lawyer said.