Work appraisal can settle NAIA-3 row

Open skies definitely can boost tourism. Letting more foreign airlines into the Philippines, even only in secondary gateways, would swell the number of cheery-spending sightseers. The entry of eight new carriers into Clark International Airport mainly fueled Central Luzon’s recent boom in travelers. In only six years, passenger volume zoomed from 7,000 in 2003 to 600,000 in 2009, mostly from East Asia. Nearby Subic airport saw milder, but just as encouraging growth.

The success stories stir President Noynoy Aquino to open the skies as well over Davao, Cebu, Zamboanga and Laoag. Reportedly by today he will issue an executive order on liberalized aviation, similar to his predecessor’s. Gloria Arroyo’s EO 500 gave the Civil Aviation Board a 30-day cutoff to process new passenger and cargo applicants to Clark. Carriers from ASEAN countries and Korea were given priority because of existing air service agreements. But the Clark Development Corp. was made part of Philippine negotiating panels for new chartering offers. The Air Transport Office, and Bureaus of Customs, Immigration and Quarantine were swung to support Clark’s expanded operations.

By replicating Clark’s tourism surge in the four other gateways, the Philippines hopes to match Thailand and Hong Kong. A series of black travel advisories from foreign lands and a hostaging of foreigners weighed down the tourism department in 2010. Still, from latest updates, it’s likely to hit the target of 3.3 million arrivals. But that’s a far cry from Thailand’s 14.1 million and Hong Kong’s 16.9 million in 2009.

Yet open skies alone cannot attract more tourists. There need to be infrastructures that visitors look for. These range from simple drinking fountains and clean restrooms in airports, to wholesome lodgings and eats. Basic services and utilities need to be rolled out. What is tourism without the guides and brochures, unique planned destinations, and transport? Too, government presence is a must. Travelers need shielding from conning cabbies and hawkers. Resorts need protection from visitors who, say, scoop up corals for souvenir, blind tarsiers with camera flash, or litter beaches with plastics. Regulators must ensure safe, efficient and affordable tour offers. (Of late there’s been a rash of abrupt cancellations by Singaporean Tiger Airways of paid tickets.) The Civil Aviation Authority must get the Philippines out of the US and European blacklists of unsafe navigation facilities.

Too, open skies must not be at local airlines’s expense. Air pacts must be truly reciprocal, not results of foreign browbeating. Overseas carriers cannot grab domestic routes. In effect, open sky is not only about tourism, but other industries too. As for critics, insultingly calling the proponents names will not work.

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German Ambassador Christian-Ludwig Weber-Lortsch says his government wants the NAIA-3 dispute resolved. To which Malacañang replies that it too wants settled the row with German airport builder-operator Fraport AG.

The issue resurrected last December when the World Bank arbiter in Washington annulled its August 2007 ruling against Fraport. The firm, one of Germany’s biggest, is partly owned by the federal government, the state of Hesse, and the city of Frankfurt. It sued before the International Court for Settlement of Industrial Disputes when the Philippines expropriated the NAIA-3 in December 2004. This was after the Supreme Court voided the build-operate-transfer (B-O-T) deal for being onerous and overpriced, and the terminal defective.

At first the ICSID said Fraport had no right to its claimed $425-million expense to build the terminal. This, after the Philippines was able to prove criminal violations by Fraport, especially of the Anti-Dummy Law. It turned out that the German investor owned 61.44 percent of build-operate-transfer contractor Piatco, when as a foreigner it is limited to only 40 percent in a public utility like an airport. But on Fraport’s appeal, the ICSID voided its original verdict, saying the firm was not given the chance to peruse the anti-dummying complaint.

The latest ruling puts everything back to square one. Fraport is afforded the chance to re-file its $425-million claim. The Philippines will again have to oppose on grounds of criminal breaches. The proceedings are expensive, in legal fees alone. Although confidential, the contents can be embarrassing for both sovereigns if leaked.

There is possible accord, though. It has been pending in the Pasay City expropriation court all this time. And that is the proposal to have a prestigious international appraiser to value the NAIA-3. From that, all parties will know how much the terminal really is worth, and how much work has yet to be done. At the time of expropriation, the complex was reportedly 96-percent finished, but shoddy portions need redoing. Ceilings keep collapsing; air-conditioning, fire sprinklers, passenger tubes, escalators and baggage carousels allegedly were substandard; floor tiles and picture-window glass dangerously were undersized.

Fraport refuses to recognize the expropriation. Piatco is contesting it. Last July Piatco lost its separate $656-million claim before the International Chamber of Commerce in Singapore, also because of the dummying. Still the appraisal can be done out of court. And it should be without prejudice to the criminal cases for graft, dummying, bribery, money laundering, and violation of the Banking Act.

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