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The Supreme Court has dismissed for lack of merit the petition for
mandamus of Asia’s Emerging Dragon Corp. (AEDC), claiming the
Ninoy Aquino International Airport International Passenger Terminal
III (NAIA IPT III) Project, and for being moot, the petition for
certiorari and prohibition of the government to enjoin the Court of
Appeals from giving due course to the petition of Congressman
Salacnib Baterina who had assailed the expropriation proceedings on
NAIA IPT III in the Pasay Regional Trial Court.
AEDC had contended that as the original
proponent of an unsolicited proposal for the NAIA IPT III Project
under sec. 4-a of RA 6957 (An Act Authorizing the Financing,
Construction, Operation and Maintenance of Infrastructure Projects
by the Private Sector, and for Other Purposes), as amended by RA
7718, it has the “exclusive, clear and vested statutory right”
to the award of the NAIA IPT III Project after the award of the same
to Paircargo Consortium (PIATCO’s predecessor) had been declared
null and void by the Court in Agan. In a 62-page decision penned by
Justice Minita Chico-Nazario on April 21, 2008, the court said
“specific rights or privileges of an original proponent . . . come
into play only when there are other proposals submitted during the
public bidding of the infrastructure project.”
In the case of the NAIA IPT III Project, the
Court pointed out that, per the narration of facts in Agan (May
2003), AEDC had failed to match the more advantageous proposal
submitted by Philippine International Air Terminals Co., Inc. (PIATCO)
within the 30-day period. “[W]ithout exercising its right to match
the most advantageous proposal, [AEDC] cannot now claim to the award
of the project,” ruled the Court.
According to sources, the High Court’s ruling
is causing a stir in the business, civil and labor sectors. They
point to the adverse impact it might have among foreign businessmen
and investors.
The ruling, they claim, could further undermine
the confidence of the foreign investors in the Philippines as an
investment destination. They pointed out that if the Philippine
government is perceived as not following the rule of the law in the
formulation and implementation of contracts involving foreign firms
and contractors, the foreign investors would simply ignore or
overlook the Philippines as an investment area.
A slowdown in foreign investments will have
grave impact on employment. Despite recent robust economic growth,
the ranks of the unemployed have continued to swell. At the same
time, in the wake of the court decision, hundreds of thousands of
Filipinos would lose potential job opportunities or many would even
lose their jobs if foreign investors already here would pull out.
Also, the Philippines is considered one of the
least competitive places for doing business, precisely because of
the frequent interference of the judiciary in business decisions and
the perceived lack of fairness by the courts.
Civil society circles fret that the SC decision
could undermine the Philippine government’s position in two cases
for arbitration and damages filed against it by PIATCO (Philippine
International Airport Terminals, Co., Inc.), in international
adjudication bodies in Singapore and Washington, D.C. They said the
decision could cost the Philippines at least $1 billion in payment
of compensation and damages to PIATCO and the German state-owned
construction firm, Fraport.
In two previous decisions, Agan Jr. vs. PIATCO
and Republic vs. Gingoyon, the Supreme Court declared the PIATCO
contract as null and void. In Agan, the Supreme Court had concluded
that, “In sum, this Court rules that in view of the absence of the
requisite financial capacity of the Paircargo consortium,
predecessor and respondent PIATCO, the award by PBAC [Prequalification
Bids and Awards Committee] for the construction, operation and
maintenance of NAIA IPT III is null and void.”
In his separate opinion in Agan, former Chief
Justice Artemio . Panganiban noted that “[T]here where effectively
no public bidding to speak of, the entire bidding process having
been flawed and tainted from the very onset, therefore the award of
the concession into Paircargo’s successor Piatco was void, and the
Concession agreement executed with the latter was likewise void ab
initio. x x x ‘ In consideration of such a declaration that the
entire bidding process was flawed and tainted from the very
beginning, then, it would be senseless to re-open the same to
determine when the project should have been properly awarded to. The
process and all proposals and bids submitted in participation
thereof, and not just PIATCO’s, were placed in doubt, and it would
be foolhardy for the government to rely on them again. At the very
least, it may be declared that there was a failure of public
bidding.”
In December, at the Pasay RTC, PIATCO received a
P3 billion check representing the proffered value of NAIA IPT III
from the government. The lower court held that the propriety of the
government’s resort to expropriation proceedings had been settled
with finality in Agan and Gingoyon.
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