Recto cautions Noy on plans to privatize NAIA operations

MANILA, Philippines – Sen. Ralph Recto said the Aquino administration should proceed with caution on its plan to privatize operations of Ninoy Aquino International Airport Terminal 3 to raise revenues and possibly stem the implementation of new taxes.

Recto said the proceeds of the privatization should go directly to the national treasury and that lawmakers should determine promptly where the funds would be specifically spent.

“If you will privatize it, where will the proceeds go? How can you improve the services and where will the proceeds be spent? Could it be used to modernize our airports? Our navigation devices?” Recto said in an interview.

“It should go to the treasury, and then we will talk about it during the general appropriations act unless there is a special law on it,” he said.

Recto has filed Senate Resolution 29 calling for an inquiry by the Senate committee on finance into the status of the privatization program of the Privatization Council and the Privatization Management Office (PMO) “with the end view of generating greater revenues for the government and streamlining the bureaucracy.”

“There is an urgent need to look into the status of the privatization program of the government, particularly on the accomplishments of the program vis-à-vis its mandates, as well as the remaining assets that need to be disposed of,” Recto said in his resolution.

He noted that the privatization program generated revenues of up to P235 billion from 1987 to 2009.

Executive Order 323 issued on Dec. 6, 2001 created the privatization council and the PMO to succeed the Committee on Privatization and the Asset Privatization Trust, respectively.

“There is a need for Congress to determine if future legislation is needed in order to expedite the privatization program,” Recto said.

“Consistent with the government’s effort to generate revenues, it is imperative to review the processes involved in the disposal of government assets,” he said.

Meanwhile, Sen. Francis Escudero said he favors the privatization of NAIA 3 but only after legal obstacles to its operations have been resolved.

The International Chamber of Commerce in Singapore earlier ruled in favor of the government in the arbitration case against NAIA 3 contractor Philippine International Air Terminals Co. (PIATCO). The Washington-based International Center for Settlement of Investment Disputes had also dismissed the complaint of Fraport AG Frankfurt Services Worldwide – a member of the PIATCO consortium – against the Philippine government.

Palace’s appeal

Malacañang, meanwhile, appealed for more time to study the intricacies of the government’s case against PIATCO.

This developed as the International Chamber of Commerce in Singapore dismissed the $900-million counter-claim of the Philippine government against PIATCO’s $565-million suit for breach of concession agreements, sources said.

PIATCO had sought the ICC-International Court of Arbitration’s permission to revert to its original contract on NAIA 3 signed with the government.

The Philippine Supreme Court had declared PIATCO’s contract with the government unconstitutional and void from the beginning.

Presidential spokesman Edwin Lacierda said government lawyers have been meeting since Monday and briefing the concerned officials on the issue.

Lacierda said more briefings had to be done because of allegations that some groups had been trying to convince the Aquino administration to enter into an out-of-court settlement.

“We will present a more comprehensive report on the PIATCO case. But, in the meantime, allow us first not to answer your point. We welcome the decision of the arbitration branch, however, relieving the government of paying all those claims made by PIATCO,” he said.

“Because we are a new government, we were just briefed yesterday as to what happened in the case. After that, we will come up with a briefing,” Lacierda said.

Sources said all claims and counter-claims were dismissed because the ICC refused to rule on just compensation since it should be filed before an expropriation court.

“It’s not really a loss on the part of the government. This is still a major victory because it’s PIATCO who filed the case and lost,” a source said. –Christina Mendez and Aurea Calica (The Philippine Star)