German leader Merkel gives GMA ultimatum

Pay Fraport now, for our ties depend on it. That is the curt message of Chancellor Angela Merkel to Gloria Arroyo about the unrecompensed German builder of NAIA Terminal-3.

In a letter to Arroyo last June, Merkel expressed impatience with the long delay to repay Fraport that had erected 97 percent of the new terminal. The note was couched in polite diplomatese, but German embassy sources called it an “ultimatum” to Arroyo, perceived to be the cause of delay.

Fraport, partly German government-owned, is mired in a needless expropriation case that has dragged since 2004. The Supreme Court earlier had voided its contract to build and operate NAIA-3, and an international arbiter had rejected its damage claims. Still Fraport managers and German officials have been promised “just compensation”, only to be frustrated by reports that fund releases have gone to Filipino grafters’ pockets — again.

“I therefore ask you to give the matter your attention,” Merkel said, “and ... suggest that those involved on the Philippine and German sides get together soon to find an ultimate solution.” Tying Fraport’s compensation to renewed German aid and investment, she added: “This would allow us to create the framework for the continued development of our relations... If our economic cooperation is to be intensified, it is particularly important that German companies’ confidence in the Philippines as an investment location be strengthened.”

Fraport had partnered with locals in 1996 to form Piatco and bag the NAIA-3 build-own-operate project. Before constructing in 1999, it first renegotiated better terms, prompting the SC to annul the bait-and-switch in 2003. Months later Malacañang expropriated the nearly finished structure although it didn’t have to since the terminal was standing on state land. Fraport sued for damages before the International Center for Settlement of Investment Disputes in Washington. The ICSID dumped the suit in 2007 on grounds that Fraport, by buying up to 61.44 percent of Piatco, had broken Philippine anti-dummy laws.

Three admins allegedly extorted from Fraport-Piatco. Worst was the Arroyo team, for which they hired in 2001 a “PR consultant” as $20-million briber, Sen. Ed Angara said then. In Mar. 2007 Malacañang hurriedly gave Fraport-Piatco $62 million (P3 billion) in belated down payment for the expropriation. Reports had it later that only half the amount went to Piatco, while the other half went back to admin hands for the elections in May that year. In Sept. 2008 Malacañang prepared to pay another $400 million through two state banks. But a group associated with ex-Sen. Bobby Tañada exposed the scam to reimburse Fraport $136 million (P6.8 billion) more than it had sunk into NAIA-3.

Merkel must have heard of the shenanigans. “As you know, Fraport suffered substantial losses as a result of the expropriation,” she reminded Arroyo. “Fraport has already been promised compensation several times by the Government of the Philippines, but unfortunately the full amount has not yet been paid. This has cost the German taxpayer Euro 42 million, because in 2008 Fraport had to call on a Federal Government guarantee for that amount.”

She stressed that Germany was closely monitoring the issue, given that the Philippines already is operating NAIA-3.

* * *

Jesus Arranza, incoming CEO of the six sequestered CIIF Oil Mills and 14 subsidiaries, disputes the 1983-1999 audit that states he is on their “confidential payroll” (Gotcha, 1 July 2009):

“I started my stint at the Coconut Industry Investment Fund in Dec. 1980 when hired by San Pablo Manufacturing to market its Minola cooking oil. Prior to that I was with the company producing Baguio oil.

“From 1980-1986, as an executive of top selling Minola, I naturally received compensation. This is on record, nothing confidential.

“After 1986, when I resigned from Minola, I have not received a single centavo confidentially or otherwise from any CIIF company. The CIIF Oil Mills were sequestered after the EDSA Revolt up to this time, and are run by the PCGG. It is highly improbable, with strict monitoring of sequestered companies’ finances, that the PCGG will be giving me money under a regular or confidential payroll.

“My detractors, if they are really farmers, should be more interested to know why the CIIF failed to produce higher value specialty fats and oils. Fact is, they already bought a $1-million (P48.5 million) machine for this purpose, which arrived Aug. 2008. The Italian-made Crystallizer from Chemtech International should be operated and not sit idle, since that would be a waste of coconut farmers’ money. They should also be interested to know the causes of the losses incurred by the CIIF group, which runs to a billion pesos. Farmers should ask why, from the time the Mills were sequestered to this day, they are still producing low-value products like crude coconut oil and cooking oil, while smaller private mills are producing high-value products like bio-diesel.”

* * *

Justice won in the sentencing to life imprisonment of drug lord Amin Boratong. Dirty money, including P900 million in bank deposit and several condos, could not save him. Judge Abraham Borreta refused several bribes. The five female prosecutors — Anjanette Ortile, Amor Robles, Elizabeth Berdal, Eden Wakay-Valdez, Marlet Balagtas — withstood pressure from a (former) superior to weaken the case.

Investigative columnist Ramon Tulfo, with broadcaster-brothers Erwin and Raffy, exposed Amin’s shabu tiangge in Pasig in 2006. When congratulated, Ramon gave credit instead to then PNP deputy director general Marcelo Ele. As head of police anti-narcotics, Ele had planned and led the raid on Amin’s compound that netted dozens of pushers.

* * *

E-mail: [email protected]