16 yrs in the making: P2-B lease deal on NAIA-3 land

MANILA, Philippines – After about 16 years, two government agencies have reached a compromise agreement on the lease payments for the land where the Ninoy Aquino International Airport Terminal 3 (NAIA-3) stands.

In a statement on Monday, May 27, the Bases Conversion and Development Authority (BCDA) said it has forged an agreement with the Manila International Airport Authority (MIAA) for the lease payment for the 650,000 square-meter land amounting to P2 billion over the next 10 years — from 2013 to 2022.

MIAA, which has been the main government entity involved in the controversial NAIA-3 project, will be paying BCDA P190.5 million every year, subject to a 5% increase every 5 years.

The two entities have signed a Contract of Lease way back in April 1997, with MIAA paying annual rental equivalent to 1% of the appraised value fixed at P250 per square meter and a 10% increase every 5 years.

This original deal was supposed to take effect upon the transfer of “clean possession” of the site, but the start date of the agreement became an issue between them.

Acting on the mandate of the national government then under the administration of former President Gloria Macapagal Arroyo, MIAA expropriated the land where the international airport terminal stands in 2003.

This led to the confusion between the two on when the transfer of “clean possession” was, thus the date of when the lease would take effect was also questioned.

“In essence there were two dates in the contract that specified the effective date of the lease, first was the transfer of clean possession of the site which was on August 17, 1998 and second, the in service date or when the airport becomes fully operational which, according to MIAA, has not happened yet,” BCDA Vice President for Finance and Chief Financial Officer Nena D. Radoc

The issue was elevated to the Office of the General Corporate Counsel (OGCC), the Department of Justice (DOJ) and finally to the Office of the President (OP).

The May 2013 agreement showed the two had settled the issues amicably. “BCDA and MIAA jointly filed a motion to withdraw the pending appeal with the OP,” Radoc said.

Based on the records of the Commission on Audit, MIAA has paid BCDA P99.107 million in 2009, after NAIA-3 as partially operated in 2008.

Mothballed

The airport terminal was almost complete in 2002, but was mothballed for 6 years because of structural-turned-legal issues.

The Arroyo administration cancelled the contract of the consortium awarded the airport project – Philippine International Air Terminals Co. Inc. (Piatco) – because of irregularities. 

The national government and the Piatco stakeholders — the Cheng family and its German partner Fraport — battled it out in the courts in the Philippines and in arbitration courts abroad.

Structural issues were then put on hold, with the government, Piatco and sub-contractor Takenaka taking years to agree on how to move the project forward.

The controversial, corruption-ridden, but crucial half-used airport facility has been handled by at least 4 presidents, and the promised dates to complete what could have been one of Asia’s most modern and fully integrated international airport terminal over a decade ago.

President Benigno Aquino III had promised in his 2012 State of the Nation Address (SONA) that the airport facility will be structurally sound before he delivers his 2013 SONA. – Rappler.com