Gov’t pays initial $8 million for NAIA-3

THE GOVERNMENT has paid an initial $8 million (about P346 million) as down payment for the multimillion Manila international airport development project that a Japanese contractor first bagged in 1997.

The government has also given Takenaka Corp. the go signal to start the completion of the system works of the Ninoy Aquino International Airport Terminal 3 (NAIA-3) for it to become fully operational.

“We’ve made our initial down payment of 20% ($8 million) in September but real work would start in November,” Transportation Secretary Joseph Emilio A. Abaya said in a chance interview yesterday.

Takenaka bagged the $40-million rehabilitation project last August.

“They [Takenaka] are abiding by the July 2014 deadline,” Mr. Abaya added.

The rehabilitation works, which is mainly the completion of the 23 system works requirement of NAIA-3, include baggage handling, flight information displays, computer terminals, gate coordination, and fire protection systems, among others.

Mr. Abaya said that of the 23 system works that are required by the government, Takenaka has already procured 14.

Mr. Abaya said that the funding for the payment came from the 2013 budget.

“No need for an item for 2014,” he said, explaining that the whole payment for the project was already included in this year’s budget.

With the said completion, the Department of Transportation and Communications (DoTC) expects NAIA Terminal 3’s annual passenger capacity to double to 13 million passengers from almost 6 million passengers a year. The said terminal posts at least 37,000 passengers daily.

Takenaka was the primary subcontractor of Philippine International Air Terminals Co., Inc. (Piatco), builder of NAIA-3, which had taken the government to court over the cancellation of its contract and the expropriation of the facility.

The NAIA-3 contract, awarded to Piatco in 1997 during the Estrada administration, was declared irregular by the Arroyo government in 2002.

CASE FOR COMPENSATION
Partly owned by Germany’s Fraport AG, Piatco had won the build-operate-transfer (BOT) contract to build NAIA-3.

After the government halted construction of NAIA-3, Piatco and Fraport lodged cases before the International Chamber of Commerce (ICC) in Singapore and the International Center for Settlement of Investment Disputes (ICSID) in Washington DC, respectively.

Takenaka had joined in the dispute to seek compensation.

ICSID and ICC have since ruled in favor of the Philippines after the Supreme Court nullified the government’s contract with Piatco.

Last August, the third division of the Court of Appeals (CA) ordered the government to pay Piatco $371 million, including a 6% annual interest, as just compensation for the takeover of NAIA-3.

This was an amendment to the 2011 decision of the Pasay City Regional Trial Court (RTC) Branch 117, which pegged the just compensation at $116.35 million.

But former Transportation now Local Interior Secretary Manuel A. Roxas II earlier said subsequent government negotiations with Takenaka resulted in both parties agreeing that the Japanese firm would just execute the airport system project, instead of getting compensation.

Mr. Roxas had earlier said talks with Takenaka had been made possible after a Pasay City court allowed the government to set up an escrow account to pay contractors behind the project.

Once NAIA-3 is fully operational, a portion of NAIA-1 operations will be transferred to the new facility in order to decongest the ageing main airport, which is presently undergoing structural rehabilitation.

Currently, only a third of NAIA-3 is equipped with airport systems and only half of the terminal is being utilized, Octavio F. Lina, NAIA-3 terminal manager, had said in November last year.

The DoTC earlier said completion of NAIA-3 coincides with other projects aimed at enhancing the quality and safety of Philippine aviation.

These include the adoption of a world-class aviation CNS/ATM (Communications, Navigation, and Surveillance/Air Traffic Management) System, which will be fully operational by November 2015.

Other improvement projects for various airports across the country are the P434.5-million Upgrading of Night Landing Operations Project, and the P258.9-million Installation/Upgrading of Airfield Lighting Systems and Upgrading of Power Supply Systems Project. -- Lorenz Christoffer S. Marasigan

source:  Businessworld