Fraport to press for compensation

Fraport AG said yesterday it will pursue compensation claims for $425 million after the Supreme Court revoked the German airport operator’s franchise for the new terminal at the Ninoy Aquino International Airport in Parañaque City.

The Supreme Court on Wednesday affirmed a May 2003 ruling that declared the government’s contracts with the Philippine International Air Terminals Co. Inc. (Piatco) invalid, citing anomalies in the bidding and alleged onerous provisions.

Fraport, which claims a 30 percent interest in the $650-million Piatco project, said yesteday that the latest decision came as no surprise and is by no means a "final end" to its claim for compensation, which it set at $425 million.

"Rather, in view of the previous Supreme Court decision, Fraport already applied last summer for an arbitration procedure at the World Bank to receive compensation from the Philippine government for the nearly completed International Passenger Terminal 3 project," it said in a statement.

The latest court ruling "confirms for the first time that the government can only take over the terminal following payment of compensation."

It said the ruling stated that the court was "not unmindful of the reality that the structures comprising the (terminal) facility are almost complete and that funds have been spent by Piatco in their construction.

"For the government to take over the said facility, it has to compensate respondent Piatco as builder of the said structures. The compensation must be just and in accordance with law and equity for the government can not unjustly enrich itself at the expense of Piatco and its investors," it said.

Fraport said that the ruling "unmistakably calls on the Philippine government to negotiate a compensation agreement with Piatco or its shareholding partners."

The German firm said it is "striving to get respective talks with the government resumed without jeopardizing, in any form whatsoever, the arbitration procedure now in process at the World Bank in Washington." — AFP