Piatco issue: What went before | Inquirer Business
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Piatco issue: What went before

/ 09:04 PM May 24, 2011

IN 2002, the Arroyo administration voided Philippine International Air Terminals Corp.’s (Piatco) contract to build the Ninoy Aquino International Airport Terminal 3 (Naia 3) on grounds that certain provisions were illegally renegotiated by ousted President Joseph Estrada in 1998 to the disadvantage of the government.

Approved for construction in 1997, the Naia 3 terminal was originally scheduled to open in late 2002. It was to replace the International Passenger Terminal 1. When operational, it should accommodate all international traffic.

German firm Flughafen Frankfurt Main AG (Fraport) is the principal investor in Piatco, the consortium tasked to build the terminal.


The Supreme Court nullified the Piatco contract in 2003.

On Dec. 21, 2004, the Office of the Solicitor General filed with the Pasay City Regional Trial Court a case to expropriate Naia 3 in an effort to have it working at the soonest time possible. The Pasay court issued a writ of possession to the government, but ordered it to pay Piatco P3-billion ($53.57 million) down payment as compensation.

Fraport accused the government of breaking the law when it took over the terminal, dismissing the government’s offered down payment as insufficient. Fraport brought its case for compensation to the World Bank while Piatco sought a separate arbitration with the Singapore-based International Chamber of Commerce (ICC) arbitration tribunal.

On Aug. 23, 2006, the ICC ordered the government to return the facility to Piatco until a valid writ of possession was issued by a Philippine court. It said the writ released by the Pasay court in 2004 could only be considered valid if there was proof that the P3 billion down payment had been paid.

The following month, Piatco received the P3 billion from the government, paving the way for the Manila International Airport Authority to continue work on the facility for its opening.—Compiled by Inquirer Research; sources: Inquirer Archives

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TAGS: Fraport, Government, Legal issues, Naia-3, Piatco
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