"Philippines Seizes Disputed Airport Terminal"

Tuesday, December 21, 2004

Philippines seizes disputed US$650 million airport terminal in Manila 
Agence France Presse
 
 
MANILA - The Philippines announced on Tuesday that it was taking over a
US$650 million Manila airport passenger terminal project owned by a
consortium involving Germany's Fraport AG. 

Manila offered a US$53.57 million downpayment to the consortium and hopes to
open the terminal next year, Trade and Industry Secretary Cesar Purisima
said in a statement.  

The case has been under international arbitration in Washington and
Singapore since last year after President Gloria Arroyo invalidated the
"build-operate-transfer" contract of the Philippine International Air
Terminals Co (Piatco) consortium. 

The consortium filed for arbitration after the Philippines Supreme Court had
upheld the government's action last year. 

"With the expropriation the government can now take over the facility and
(put) its operations (up for tender). Hopefully we can open the air terminal
as early as 2005," Purisima said. 

"We cannot allow a vital infrastructure to rot and render useless billions
of pesos of investments." 

Arroyo's Executive Secretary Eduardo Ermita said government officials were
to serve a "writ of possession" on Piatco, but stressed that government will
give the consortium "fair and just compensation". 

The terminal "belongs to the Filipino people" and its expropriation is
within the bounds of law, Ermita said. 

He said the facility should be operational within six months, with Arroyo
ordering officials to complete unfinished work. 

Piatco spokesman Moises Tolentino said the government had notified it of the
expropriation. 

"Right now I cannot comment on that. Our lawyers are studying it," Tolentino
said on ABS-CBN television. 

In voiding Piatco's operating contract, the Arroyo government alleged that
the 1998 document signed by the previous government of Joseph Estrada had
been disadvantageous to the Philippines. 

The government earlier offered to pay Piatco US$350 million, but the
consortium said it was not enough to cover its costs, which it said had run
up to US$535 million. 

Estrada was toppled in a bloodless, military-backed popular revolt in 2001
and is on trial for unrelated charges of corruption.


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