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OSG asks SC to reverse NAIA 3 ruling

Manila Bulletin

OSG asks SC to reverse NAIA 3 ruling

Questions decision allowing gov’t takeover after just compensation

Decision will delay Terminal 3 operation - Benipayo

6 January 2006

The Office of the Solicitor General (OSG) yesterday asked the Supreme Court to reconsider its decision allowing the government to take over Terminal 3 of the Ninoy Aquino International Airport (NAIA) only after payment of an initial P3.002 billion to the Philippine International Air Terminals Co. (PIATCO) representing the proffered value of the facilities.

Last Dec. 19, the High Court ruled that within 60 days from the finality of its decision, the Pasay City Regional Trial Court (RTC) will determine the just compensation to PIATCO for the construction of Terminal 3.

In a 42-page motion for reconsideration signed by Solicitor General Alfredo Benipayo, the OSG claimed that the decision of the High Court "will further delay, if not virtually foreclosed," the takeover of NAIA’s Terminal 3 and "will work grave injustice to the government and other lawful claimants to the just compensation."

"Contrary to the expectations of the majority, the SC decision dated Dec. 19, 2005 may have just dealt the death-blow to the only real chance for the government to complete, open and operate the terminal within the foreseeable future," the OSG said.

In its motion, the OSG noted the several pending claims for compensation filed by Japanese builder Takenaka and Asahikosan, the actual builders of the terminal, as well as Fraport AG, PIATCO’s German investor.

OSG said that NAIA Terminal 3 is just a building and will not be operational as an airport unless the basic features are set in place such as parallel taxiway, apron, loading bridges, baggage handling system, passenger information system, x-ray and similar system, airline offices, concession and retail areas, passenger lounges, government service areas, control tower, transportation linkages, MEP works, fuel system, air-conditioning system, and sanitation system.

It also noted the pending case filed by Fraport AG, PIATCO’S German investor, before the International Centre for the Settlement of Investment Dispute seeking the payment of US$ 425 million from the government.

It stressed that it has an obligation under its Bilateral Investment Treaty with Germany that Fraport AG should take steps to ensure that the compensation provided in the "just compensation" will be paid, in part, to the German investor to the extent of their interest.

The Dec. 19 decision of the SC, penned by Justice Dante O. Tinga, affirmed with modification the Jan. 4, 2005 order of the late Pasay RTC Judge Henrick Gingoyon allowing PIATCO to get over P62 million in government deposit.

The trial court issued last December a writ of possession in favor of the government but later allowed the release to PIATCO of the million deposit as requirement for the takeover of the Terminal 3.

The government questioned the trial court’s ruling, saying it is only willing to pay a deposit of over P2.8 billion ($ 53 million). On Jan. 14, 2005, the High Court issued a temporary restraining order stopping the implementation of Gingoyon’s rulings in favor of PIATCO.

In its decision, the SC said:

"All told, the Court finds no grave abuse of discretion on the part of the RTC to warrant the nullification of the questioned orders. Nonetheless, portions of these orders should be modified to conform with the law and the pronouncements made by the Court herein.

"Wherefore, the petition is granted in part with respect to the orders dated 4 January 2005 and 10 January 2005 of the lower court. Said orders are affirmed with the following modifications:

"The implementation of the writ of possession dated 21 December 2005 is held in abeyance, pending payment by petitioners (Republic of the Philippines represented by Executive Secretary Eduardo Ermita, the Department of Transportation and Communications and the Manila International Airport Authority) to PIATCO of the amount of three billion two million one hundred twenty five thousand pesos (P3,002,125,000), representing the proffered value of the NAIA 3 facilities.

"Petitioners, upon the effectivity of the writ of possession, are authorized to start the implementation of the Ninoy Aquino International Airport Passenger Terminal III project by performing the acts that are essential to the operation of the said International Airport Passenger Terminal project.

"RTC Branch 117 is hereby directed, within sixty (60) days from finality of this decisions, to determine the just compensation to be paid to PIATCO by the government.

"The order dated 7 January 2005 is affirmed in all respects subject to the qualification that the parties are given ten (10) days from finality of this decision to file, if they so choose, objections to the appointment of the commissioners decreed therein."