"Piatco accepts Manila terminal payment by installment"

Monday, January 17, 2005

Piatco accepts payment by installment
Philippines - The Manila Standard


When the Ninoy Aquino International Airport Terminal-3 is fully completed
six months from now, Philippine Airlines will transfer its domestic and
international operations to the state-of-the-art facility.

This plan was revealed yesterday by a Malacanang source even as the Naia-3
contractor, the Philippine International Air Terminals Co. (Piatco) said it
was willing to be paid by installment by the government out of the rental
fees collected from airlines and other business firms at the terminal.

The source revealed that transportation authorities have already discussed
with PAL management the plan to house PAL operations in Naia-3.

At present, PAL is using the Naia-2 (Centennial Terminal) for its
international operations and the Manila Domestic Airport for local flights.

Based on the plan, Naia-2 will be used purely for domestic flights by other
commercial airlines.

Lawyer Liwayway Vinzons-Chato, legal counsel for Piatco, said the company
will not contest the government's expropriation of Naia-3 as long as both
sides can settle the issue of just compensation.

Last week, President Gloria Macapagal Arroyo announced a government plan to
pay $62.34 million (about P3 billion) as down payment to Piatco and the
remainder to be paid by installment from the terminal's earnings.

Chato said that Piatco is willing to be paid out of the rental fees while
the government will retain the terminal fees that are collected from
passengers.

She said that Piatco, like the government, would like to see Naia-3 start
commercial operations as early as possible.

"We have been saying from the very beginning, who does not want a win-win
situation? The owners and investors of Piatco are businessmen. They want to
recoup their investments even if at a loss," Chato told a radio interview.

The Piatco lawyer revealed that the government, during the series of
negotiations on the compensation issue, was willing to pay only $300 million
but Piatco was claiming as much as $565 million.

Initially, the Pasay City Regional Trial Court held that the government
should first fully pay Piatco before it can operate Naia-3. It ordered the
government to immediately release the $62.34 million that it deposited with
Land Bank of the Philippines to Piatco as initial payment.

But the Supreme Court, in response to a government petition, issued an order
last week restraining the lower court from enforcing the payment order.

Presidential Spokesperson Ignacio Bunye belied insinuations that the
restraining order was issued because the high tribunal is allegedly beholden
to Malacanang.

"I think that is very unfair for the court. It was no less than Chief
Justice Hilario Davide Jr. who penned the court order. I do not think that
the Chief Justice would be vulnerable to pressures from anybody," Bunye
said.

Chato defended the Pasay City RTC's order for full payment of compensation
to Piatco, saying this is in accordance with Republic Act 5974.

"Under RA 5974, there must first be a determination of the just compensation
within 60 days from filing of the expropriation case before the writ of
execution of the property can be issued," she explained.

She said that Piatco's demand for $565 million is based on the standard for
computing just compensation which is the "replacement cost," meaning the
cost of building the terminal at this time.


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