Philippine govt takes control of disputed airport terminal


Manila (XFNews-ASIA) - The government says it has taken control of the third international terminal at the airport here after agreeing to pay 3 bln pesos in compensation to its builders.

The government has agreed to pay Philippine International Air Terminal Corp (Piatco), which includes Germany's Fraport AG, presidential spokesman Ignacio Bunye said in a written statement.

PIATCO built the 650 mln-usd terminal under a build-operate-transfer contract.

Fraport, which held a 30 pct stake in PIATCO, has sought arbitration of the dispute in Washington, demanding compensation of 465 mln usd.

President Gloria Arroyo revoked the contract in 2002 on the grounds that certain terms were illegally renegotiated by her predecessor, Joseph Estrada, in 1998.

The terminal has been mothballed since the contract was revoked and has been the subject of bitter legal arguments between the government and the builders.

"This legal dispute has incurred so much delay and we believe it is high time now to settle the issue once and for all in order to serve the interest of the public with regard to the use of the facility," Bunye said.

The money was a reasonable price to pay, compared to what the government stands to gain once the terminal starts operating, he added.

In December, the Supreme Court ordered the government to pay 3.0 bln pesos as compensation to Piatco.

Terminal Three is designed to handle 13 mln passengers a year and ease congestion at the two present international terminals.

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