Palace: Govt ‘determined’ to resolve Fraport issue

Even though it has yet to define its course of action, the Philippine government is determined to resolve the dispute with German transport company Fraport AG regarding Ninoy Aquino International Airport 3 (NAIA 3) operations, a Palace official said Wednesday. Presidential Communications Development and Strategic Planning Secretary Ricky Carandang said the government is determined to resolve the issue whether or not Germany pushes through with its planned financial assistance to the Philippines. Sebastian Lesch, press officer of the Berlin-based German technical cooperation agency Gesellschaft für Technische Zusammenarbeit (GTZ), was previously quoted by The Daily Tribune as saying that at least €46 million (P2.8 billion) in financial assistance to the Philippines will be placed on hold until the Fraport-NAIA-3 controversy is resolved. "Whether or not the financial assistance comes, we want a resolution to the Fraport issue so that’s not going to be a factor for us," Carandang said in a press briefing in Malacanang. "The Fraport issue will be resolved in the interest of the Philippine government, and not the German government. If we can find a solution to the Fraport issue that is acceptable to everybody, that’s all well and good," he said. The Arroyo government had ordered the takeover of the NAIA 3 project in 2007 after persistent questions about the original contract and charges of mismanagement. Talks between the government and Fraport led to an extortion complaint filed by the latter with the World Bank. The firm alleged that three of then president Gloria Macapagal-Arroyo's aides demanded million-peso in kickbacks in exchange for favorable government action. Arroyo later aborted the contract with PIATCO, the Philippine company formed by Fraport and its local partners. The Philippine government then won an arbitration case involving NAIA 3 before the International Chamber of Commerce-International Court of Arbitration in Singapore. In August 2007, an International Center for Settlement of Investment Disputes (ICSID) tribunal also dismissed Fraport's claims for compensation because it supposedly violated the Philippines' anti-dummy law. Fraport and PIATCO challenged these decisions before an ad hoc committee of the ICSID. The ICSID committee last month annulled the August 2007 decision. It ruled that the tribunal failed to give Fraport the opportunity to review the Philippine Department of Justice special prosecutor ruling regarding anti-dummy law violations. Its decision asserted the right of Fraport to file an arbitration case against the Philippines. Terminal 3 has been partially open since 2008. Its full operation has been delayed for at least eight years. The Philippine government had earlier said the ICSID's decision will not affect NAIA 3 operations for now. "The decision merely provides Fraport the opportunity to commence a new arbitration and to present its claims again. Likewise, the [Philippines] is entitled to present the evidence against Fraport again," said Solicitor General Jose Anselmo Cadiz. The government is still entitled to maintain its argument that Fraport violated Philippine anti-dummy and other anti-corruption laws, he said. "The [Philippines] therefore retains the right to reassert all of its defenses against Fraport’s claims, including its arguments relating to Fraport’s violation of the Anti-Dummy Law and anti-corruption laws," Cadiz said.—JV, GMANews.TV