Fraport seen keen on negotiating with PH over Naia 3 row

The government is considering entering into negotiations with German airport operator Fraport AG that could lead to the settlement of a decade-long issue—now with an international court—over the latter’s investment in the Ninoy Aquino International Airport Terminal 3.

Transportation Secretary Joseph Abaya said his office had received “feelers” from Fraport of its intention to settle the case. However, he said, the government had not decided yet whether it would engage in negotiations with the firm.

Fraport, which has a pending case against the Philippine government before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C., operates Frankfurt Airport and several other facilities across four continents.

“There were certain feelers coming from Fraport that they would want to negotiate this out,” Abaya told reporters.

“We are exploring the possibility but it’s all preliminary … we still have to sit down and figure out the government’s position on this,” he added.

Abaya declined to elaborate, saying he did not want to compromise the government’s bargaining position on the matter. A Fraport spokesman did not respond to an Inquirer request for comment on Wednesday.

Fraport is the foreign partner of Naia Terminal 3 winning contractor Philippine International Air Terminals Co., or Piatco, which also sued the Philippines in Singapore but whose petition was denied.

Fraport’s current appeal with ICSID was filed two years ago after the case was initially dismissed in 2007.

Fraport officials had said they were suing the government to recoup the company’s investment in Naia Terminal 3, after the Philippine government acquired control of the terminal.

Naia Terminal 3 was scheduled to open in 2002 but it was mothballed by the Arroyo administration, which cancelled the contract with Piatco amid allegations it was riddled with anomalies, including violations of the anti-dummy law.

The terminal finally opened in 2008.

Abaya reiterated during the interview that the government was appealing a decision of the Court of Appeals in July requiring the state to pay Piatco $371.43 million following the expropriation of Naia Terminal 3.