Germany, PH want to move on from NAIA 3 row

MANILA, Philippines (UPDATED) – Germany’s Foreign Minister Guido Westerwelle and his 12-man business delegation arrived in Manila Thursday, February 7, for talks with the Philippine government on a number of issues, including the long-standing dispute over a Manila airport.

The visit—the first high-level delegation from Germany in over a decade—signifies “our mutual desire to further enhance our ties,” Philippine Foreign Affairs Secretary Albert del Rosario said.

One of the main issues officials of both countries will discuss is the case against German firm Fraport over the Ninoy Aquino International Airport Terminal 3 (NAIA-3), which del Rosario said froze relations between the Philippines and Germany in the past.

No magic formula

While there is no “magic formula” to resolve the issue, del Rosario said, “I have come to an understanding with Minister Westerwelle that we are looking forward to the positive resolution of the Fraport case.”

Fraport was the foreign partner of Philippine International Airport Terminal Co. (Piatco), the consortium that bagged the contract to build NAIA 3. The Manila airport project was the German firm’s first overseas investment.

The Philippines nullified the contract in 2002 over allegations the consortium violated the Anti-Dummy Law.

“We are very optimistic about this considering the openness that both sides have expressed regarding possible options that we could explore,” del Rosario said.

The case should also not prevent German companies from partnering with Filipinos in the energy, manufacturing, outsourcing, tourism and infrastructure sectors, the DFA chief added.

“I encourage German companies to follow the lead of their peers in capitalizing on the positive investment environment in the Philippines and put their capital in the country,” he said.

NAIA-3 battle

The Philippine and German governments faced off in an international arbitration court over the NAIA 3 airport terminal project, the subject of a series of structural-turned-legal issues.

German operator Fraport filed a compensation case before the Washington-based International Center for Settlement of Investment Disputes (ICSID), claiming the Philippines violated bilateral investment treaties when the Arroyo administration abrogated the award of the project to their consortium.

Piatco filed a separate damage suit before the Singapore-based International Chamber of Commerce (ICC).

The ICC ruled in favor of the Philippine government in 2011, saying Piatco violated the Anti-Dummy Law. The Singapore court said the Fraport-Piatco consortium illegally ensured that the German firm would control NAIA 3 through shareholder agreements and loans.

A lower court in the Philippines is still determining how much it will compensate the consortium for the airport terminal that was almost complete in 2001, but was not used for about 6 years because of structural defects.

Delays and promises

NAIA-3 was designed to be the country’s prime international airport terminal. The go-signal for the long delayed structural and system repairs will likely be granted to Japanese builder Takenaka soon. Takenaka is the subcontractor of the Fraport-Piatco consortium awarded the contract to build the terminal in 1997, during the Estrada administration.

In his July 2012 State of the Nation Address (SONA), President Benigno Aquino III noted, “I am the 4th president to deal with the problems of NAIA Terminal 3. Airplanes are not all that take off and land here; so did problems and anomalies.”

Aquino’s promise to make sure NAIA 3 is structurally sound before his 2013 SONA was among the long list of deadlines set by previous leaders to maximize the crucial airport infrastructure.  

Transportation Secretary Joseph Emilio Abaya said NAIA 3 was targeted to be 100% operational by December 2013.

Defense relations

Aside from from addressing the NAIA 3 issue and keeping trade relations vibrant, the two countries are looking at re-invigorating defense relations.

According to Del Rosario, Germany expressed its support for the Philippines’ position toward a peaceful resolution of its territorial dispute with China in the West Philippine Sea.

Accompanying Westerwelle during the courtesy call were German Ambassador Joachin Heidorn, Director General for Asia, Latin America and the Near and Middle East Clemens von Goetze, and Private Secretary to the Foreign Minister Markus Kleft. – Rappler.com