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NEWS Last modified on September 9, 2015

Fraport-led PIATCO consortium to finally get compensation for Manila terminal?

PIATCO's long running bid for justice from the Philippine government over its decision to rip up its operating contract for Manila-Ninoy Aquino International Airport's Terminal 3 appears to be over after the country's Supreme Court awarded the Fraport led consortium $510 million in compensation.

The amount takes into account a previous advance payment of about $59 million made in 2006 by the Philippine government to PIATCO (including interest as of December 31, 2014) in connection with the Terminal 3 project at the Manila gateway.

If the government pays up, and it has the right to appeal, it will finally end a 11 year saga that started in December, 2004, when the then Philippine government decided to seize control of the terminal overnight and kick out the PIATCO consortium months before its planned opening.

In a statement released in the aftermath of the Supreme Court's decision, Fraport said it welcomed the decision although it realised that the saga may not yet be over.

"The decision is not yet final. It remains to be seen whether the parties involved will seek any legal recourse against the ruling," says the statement.

"The date, when the Philippine government will meet its liability to pay compensation to PIATCO, will depend upon the further progress of the proceedings. Only then can Fraport AG also receive a compensation payment."

Fraport had a 30% stake in PIATCO had signed a 25 year operating contract for the terminal under the terms of a Build Operate Transfer (BOT) with the Philippine government.

The terminal today handles around 13 million passengers yearly and, according to Fraport, "generates corresponding revenues".

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