NAIA-3 stuck on woes

I was among those who witnessed the plan for the construction of a new, much bigger, and modern airport conceived during the term of former President Fidel V. Ramos sometime in 1993. We were on board the chartered Philippine Airlines (PAL) that took FVR and his official entourage to his first state visit to China that year.

Aside from Cabinet and other government officials and the media, the presidential delegation to Beijing also included many Filipino-Chinese business executives led by the biggest taipans in the Philippines. Among them were George Ty of Metrobank, John Gokongwei of JG Summit, Andrew Gotianun of Filinvest, George Go of Equitable Bank, Lucio Tan of Fortune Corp., and ambassador Alfonso Yuchengco of RCBC. The top-notch business delegation prompted a wisecrack from among us passengers that if anything goes wrong with our flight, almost two-thirds of the Philippine economy will go down with us.

That was not a funny quip, especially if you’re on board that flight. But in his usual go-go, cheerleader spirit, FVR swapped jokes, interspersed them with his thoughts and vision for the Philippines to join the ranks of newly industrialized countries (NIC) in this part of the world. At that time, the buzzword was about the "tiger" economies of China and South Korea. As a basic ingredient of economic development though, FVR tossed the idea that the Philippines ought to have a new and more modern airport to bring in and accommodate more tourists and investors to the country.

Thus, the idea of a new international passenger terminal came about to replace the existing Ninoy Aquino International Airport (NAIA), as well as a new domestic airport to beef up the Manila Domestic Airport. The six taipans led by Tan boldly took up the challenge of FVR to bankroll the planned new airport terminal. And as events subsequently unfolded, the six taipans put up the Asia’s Emerging Dragons Corp. (AEDC).

At that time, the government was privatizing PAL and the group of former top honcho of the Philippine Long Distance and Telephone Co. Antonio "Tonyboy" Cojuangco bought a large chunk of the shares of this flagship airline. It turned out later though, to the surprise of the government, that the majority of ownership behind Cojuangco’s group was actually Tan’s. The tobacco tycoon finally came out to take over the management of PAL in 1994.

Since the government does not have the money, the Ramos administration reluctantly proceeded with the bidding of the proposed project to put up a new international airport under the Build-Operate-Transfer (BOT) scheme with the Tan-led AEDC as one of the bidding parties. But somewhere along the way, the AEDC lost the bidding to the Philippine International Air Terminals Co. Inc. (PIATCO) which won the contract to build the Ninoy Aquino International Airport (NAIA) Terminal-3. The PIATCO consortium was composed of AG Fraport of Germany, Takenaka of Japan, and several other foreign and local partners. FVR even led the first groundbreaking rites for the original site chosen for NAIA-3 Terminal put up at the former Base Operations of the Philippine Air Force headquarters in Villamor Airbase in Pasay City.

The initial construction of NAIA-3 went into a lot of troubles under PIATCO and at one point, they did not only change the site of the terminal but also sought amendments of the original contract. They entered into supplemental contracts with the administration of former President Joseph Estrada when he took over in June 1998. Another groundbreaking rites took place and this time, led by Estrada in a new site for the NAIA-3.

As if the troubles of NAIA-3 were not enough though, when President Arroyo took over the helm from Estrada in January 2001, the government abrogated the PIATCO deal a year later due to alleged anomalies that went into the supplemental contracts. Court actions here and abroad stalled the entire project nearing its completion. In 2002, the Supreme Court upheld the voiding of the contract for being onerous and disadvantageous to the government.

Graft cases were even filed against a number of government officials as well as PIATCO executives. But the Sandiganbayan last week, however, dismissed the graft case against former Transportation Undersecretary Wilfredo Trinidad and four PIATCO executives led by its president Cheng Yong, public relations consultant Alfredo Liongson, and German nationals Hans Arthur Vogel and Bernd Struck, of Fraport.

The Singapore-based International Chamber of Commerce (ICC) Arbitration Tribunal ordered last week the Philippine government to return NAIA-3 to PIATCO as its builder. Germany’s Fraport AG, which has a 30-percent stake in PIATCO, is pursuing a separate arbitration in Washington, demanding compensation of $465 million for the project.

The Court of Appeals lifted its injunction to the government’s P3 billion expropriation to PIATCO to pave the way for the state takeover of NAIA-3. Transportations and Communications Secretary Leandro Mendoza, who is one of the Cabinet officials tasked to oversee the full commercial operation of NAIA-3, admitted yesterday it would take at least six to eight months more before the government can finally use the facility and another $6 million more in expenses to ensure the safety and structural integrity of the entire complex. Only a few months ago when it was about to be opened for commercial operations, the NAIA-3 ceiling collapsed. And the rest of the NAIA-3 woes continue up to now.

The SC decided yesterday to set the oral arguments of the AEDC petition on Oct. 17 to stop the government’s expropriation of PIATCO. The company has expressed its willingness to assume the obligation of government’s paying PIATCO as the terminal’s builder and spend for the terminal’s completion. PIATCO claims that the project had cost them $565 million, and Fraport says it had shelled out slightly more than $400 million for the terminal. But the government is only willing to pay PIATCO P3 billion, or $60 million, equivalent to about 10 percent of their asking price.

That’s more or less, the long and short of the NAIA-3 story. So it’s rather saddening that up to now, after more than a decade since the NAIA-3 Terminal plan was first conceived, it has yet to operate. With the original six taipans now just down to Tan by himself, the AEDC has renewed its bid to regain the lost contract of NAIA-3. At least, Tan has not given up pursuing this vision the taipans once shared with FVR.

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