Arroyo Uses Manila's Controversial Airport Terminal

01 July 2008


Philippine President Gloria Macapagal Arroyo used a mothballed terminal at Manila's crowded international airport on her return from a US state visit on Monday, and ordered it be made ready for commercial use in weeks.

Terminal 3 at Manila airport was scheduled to be in service in late 2002 but has been kept unused after a bitter dispute between the government and the builders consortium, headed by German airport operator Fraport.

Foreign investors say the sight of the large, deserted terminal, on a road leading from the airport to upscale residential areas south of Manila, is a stark reminder of the graft and legal uncertainties that can beset firms doing business in the Philippines.

Arroyo and other passengers on board a Philippine Airlines flight from San Francisco landed early on Monday morning and disembarked at Terminal 3, the first time the facility has been used by a commercial flight.

Radio reports said the president inspected customs, immigration and baggage arrangements and told officials to make some improvements.

She told Michael Defensor, the head of a task force on the terminal, to get it ready for use by domestic airlines within three weeks, the reports said.

"For international flights, we hope to have it in a minimum of six months to a maximum nine months," Defensor told reporters.

The Philippine government seized the terminal, which has a capacity of 13 million passengers a year, in 2004 after a contract dispute with the Fraport-led consortium. Fraport and the joint venture company for the project are pursuing compensation claims for over $400m.

"We want this to be used, this has been idle for so long and we need this," said Alfonso Cusi, general manager of the Manila International Airport Authority.

"While we are waiting for that (court) decision, we cannot wait to keep this terminal idle," he told Reuters.

A plan to open the terminal in 2006 was postponed after a section of its ceiling collapsed. Repairs and structural improvements have taken up over two years.

The other terminals at Manila's decaying airport, located in the heart of the city, have a combined capacity of about 17-18 million passengers a year.

Fraport received an initial payment of €27m from the Philippine government in 2006 for Terminal 3 and then a further €41.9m from the German Government under a state guarantee for investments outside the country.

It has said it will continue to pursue claims against the Philippine government.

By Many Mogato and Raju Gopalakrishnan, Reuters


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