Vol. XXI, No. 214 [ Business World Online ]
Monday, June 2, 2008 | MANILA, PHILIPPINES
TOBACCO AND BEER magnate Lucio Tan is embarking on a last-ditch attempt to gain control of a mothballed airport after a government contract with a German-led consortium was nullified for alleged irregularities.
Inside NAIA-3 during an inspection
in January — Jonathan L. Cellona
In a 73-page motion for reconsideration, Asia’s Emerging Dragon Corp. (AEDC) said it should be allowed to operate the Ninoy Aquino International Airport Terminal 3 (NAIA-3) under a negotiated contract pursuant to the Build-Operate-Transfer Law.
AEDC was the first to present an unsolicited proposal to build the facility before it lost to Philippine Air Terminal Co., Inc. (Piatco) and its German partner Fraport AG of Germany.
Fraport headed a consortium that built and was meant to operate the new Manila terminal, which was designed to handle 13 million passengers a year and was originally set to open in late 2002.
The Philippine government seized the terminal in December 2004 in a contract dispute, triggering a compensation claim by Fraport of more than $400 million.
In its motion, AEDC noted that since there was no valid contract to speak of, the high court should have reinstated its proposal as the original proponent.
"A negotiated contract with AEDC, as the original proponent, is justified," it added.
On April 18, the high tribunal barred the Lucio Tan company from taking over the project, saying it has no legal claim to the mothballed facility.
In a 62-page decision penned by Associate Justice Minita V. Chico-Nazario, the full court noted that the rights of the original proponent of an unsolicited proposal for an infrastructure project are not absolute. It still has to comply with the procedures and conditions provided by law.
Seven magistrates concurred, four dissented and four abstained. The court said AEDC was barred from taking over from Piatco since it had not matched its offer price.
Following the government abrogation of the contract, Fraport received an initial payment from the Philippine government of around 27 million euros in 2006 after writing down all its investment in the project in 2001 and 2002.
Fraport and Piatco are pursuing compensation claims against the Philippine government in national and international courts.
According to the Philippine government, NAIA-3 is 98% finished and will require at least an additional $6 million to complete. — Ira P. Pedrasa
