Roxas: Gov’t has legal basis to take over NAIA-3

The transportation secretary says the government now has good basis in taking over the aviation facility

MANILA, Philippines – With the recent withdrawal of the legal case of the NAIA Terminal 3 builder against the government, Transportation Secretary Mar Roxas said efforts could now be focused on improvements and repairs on the much-needed but half-used international airport terminal.
At a press briefing on Monday, February 6, Roxas described the impact of Philippine International Air Terminals Co.’s (Piatco) move to withdraw its compensation case in Singapore as “another fortification of the government’s legal right to be in possession.”
The NAIA-3, a key aviation facility whose ownership and management have been in dispute for over a decade, is now more solidly in government’s hands, Roxas said.  
“(With) the finding of the Singapore (Supreme) court (and a separete arbitration court) that the Philppine government is well within legal and ethical all grounds, the government has good basis in taking over the facility,” he said.
Ownership issues over NAIA-3 have concerned international airlines as well as concessionaires as payment of lease and management of the terminal were sometimes in limbo. Those who do business at NAIA-3 would sometimes receive letters from Piatco asking them to stop business operations if lease payments were not paid to them.

Only local airlines Cebu Pacific and Airphil Express, and recently Japanese budget carrier ANA operate flights at NAIA-3. Other foreign airlines that had wanted to move out of congested NAIA-1 reconsidered since the baggage handling and some other systems are still manually operated. 

Roxas added that they are now “amid a very intense negotiation with Takenaka,” which is the Japanese firm that was subcontracted by Piatco to build and install the much-touted world-class and integrated airport systems at NAIA-3
“(There are) about 23 systems that government found undelivered or not delivered properly. We are in negotiation for these items. We hope to conclude before the end of the month hope to conclude. Either the government undertakes the 23 systems or find an acceptable valuation from Takenaka,” he said.
Negotiations with Takenaka have actually been going on for the past 7 or 8 years. Takenaka holds the codes to the airport systems, including the airconditioning, phone systems, baggage handling, that are operated under one control room. This makes NAIA-3 distinct from the other terminals. At the NAIA-1, for example, these airport systems are not integrated.
The government has long been focused on negotiating with Takenaka since a deal with them would mean the structural repairs and renovations to keep the rest of the 10-part building fit for major events, including earthquakes, would only take less than a year. A deal with another group, which would still have to study the building, would likely mean longer time to complete the necessary engineering, structural, mechanical works.

The Aquino government, which has made public-private partnerships the cornerstone of its infrastructure strategies, has vowed to immediately see the necessary works at NAIA-3 finished so it could send the message to investors that it means business.
The legal and structural squabbles over NAIA-3 have been going on since 2002, when the Arroyo government, citing Piatco’s alleged illegal acts, cancelled Piatco’s contract to build and operate the premier aviation facility at the country’s main gateway.
The government was sued by Piatco at an arbitration court in Singapore while its German partner Fraport filed a complaint at a Washington-based court. The Philippine government, which had to employ hotshot international and local lawyers, won in both courts. Fraport has lodged an appeal while Piatco pursued the case before the Singapore Supreme Court then decided to withdraw it.
The only remaining legal and financial issue rests with the Pasay Regional Trial court, which will determine how much the government should pay Piatco for constructing the terminal. Piatco said it will continue its legal battle against the government there. –

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