POSTSCRIPT / December 1, 2002 / Sunday


Philippine STAR Columnist

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Fresh GMA resolve will work only if we…

TRUST THE LEADER: The speech yesterday of President Gloria Macapagal Arroyo may not be as earthshaking as we had wished, but it sounded tough enough to convince those who still have faith in our capacity to heal ourselves that GMA has found new resolve to save this country.

“Trust me,” the President said toward the end of her policy statement. “You will see what serious government can do.”

For our own sake, we should. This nation has suffered enough.

The President’s resolve and show of political will is useless if not matched by the citizen’s willingness to cast aside the widespread negativism. The President has called for a fresh start. Let’s heed her call and give ourselves another chance.

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TWO HEADS ROLL: To the mob crying for blood, the President delivered the heads of two Cabinet members — Environment Secretary Heherson Alvarez and Agriculture Secretary Leonardo Montemayor. She announced the replacements.

Those who had wanted Justice Secretary Hernando Perez to get the axe also were disappointed.

But the virtual clearing of Perez was foreshadowed the other day in the Palace when a jovial President welcomed Perez, and him alone, with a fond beso-beso and in effect told the world that he was still her man.

While coddling Perez, GMA made veiled threats to his tormentor, Rep. Mark Jimenez, that the Manila lawmaker might yet end up facing tax evasion and bribery charges with his confession that he had $2 million to give away. That is, if he is not extradited to the US earlier.

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PIATCO DEAL JUNKED: Another major announcement foreshadowed by earlier events was the throwing out of the $657-million contract for Terminal 3 of the Ninoy Aquino International Airport. The other day, Malacanang already announced the result of its due diligence — that the Naia-3 contract is riddled with defects that render it void from the start.

Malacanang’s action was expected. Philippine International Air Terminals Corp. (Piatco), the contractor, builder and prospective operator of the modern airport, deviated from the approved plan relying heavily on supplemental contracts of dubious legality.

Lawyers who had studied the documents reported that the Piatco contract was changed several times to the prejudice of the government and in violation of law.

Shortcuts were also made in the construction, including the dispensing with the critical access road, a tunnel as specified in the original contract, connecting the new terminal to the old. Safety was also an issue with the specifications of equipment in the original contract reportedly not followed.

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FAIR DEAL FOR INVESTOR: To understand what happened in the building of Terminal 3, imagine that you were building a house and your contractor resorted to shortcuts and deviated from the approved plans. You end up spending more and still are unable get the house of your dream described in the contract.

President Arroyo hinted at what the government will do next. It will take to court everybody who took liberties with the design and financing of Terminal 3 — whether in or out of government, whether foreigner or Filipino.

There is no reason for the warnings of some quarters that the voiding of the Piatco contract would scare away foreign investors. The opposite is more likely to happen.

The giant German firm Fraport AG, the biggest creditor of the project that provided some 90 percent of the funds needed, will get paid, probably at a discount. It has offered to take a loss just to be able to clear the slate and salvage its name.

Piatco will also get paid, but most likely minus the bonanza that would have made it super rich if the changes made in the contract were followed.

The government will take over the airport project, correct the shortcuts, and bid out various services — just to be fair — including who gets to run the terminal, originally a chore reserved for Fraport.

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OPENS IN EARLY 2003: By the first half of next year, we will have the new terminal running, standing with the world’s best. It can efficiently handle passenger and cargo traffic even if this would swell to four times the present load of the Naia.

But how will Fraport and Piatco be paid back if the government is low on cash? Remember that Fraport, which is just as eager to justify to its stockholders its deep involvement in Naia-3, is part of the solution.

Knowing the government has no money, Fraport is offering to lend it $400 million in soft long-term loans that can be used to pay (buy out) not only Fraport, but also the Chengs of Piatco, the contractor, and other suppliers.

It is important that the Chengs and other Piatco shareholders are somehow compensated for their legitimate expenses and reasonable profits. It has to be assumed that the company built in good faith on government property.

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FRAPORT HAS TO BID: With Fraport offering the money to pay everybody, the firm is still not a shoo-in as the technical partner to operate the terminal. Malacanang has made it known that the government will conduct very transparent biddings for all services, including catering, cargo handling, etc.

Everybody gets an even chance. Foreign companies, for sure, will bid. Airport concessionaires and other parties who had been assured some sub-contracts by Piatco representatives (reportedly for some consideration), will have to start all over and renew their bids.

We are wont to ask at this point where Secretary Gloria Tan Climaco is. The president’s overseer of strategic projects waded into the Piatco controversy with the instructions from the President to clean the mess and knock the crooks.

She stood up to everybody whose hidden agenda collided with national interest. At one point, she was overheard as saying, possibly in frustration, “Why is it so difficult to do the right thing in this country?”

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VARELA NAME BORROWED: Even at this late stage, Piatco stragglers are still firing in the air. One desperate defender concocted a press release quoting Miguel B. Varela, former president of the Philippine Chamber of Commerce and Industry Inc. (PCCI), as assailing President Arroyo for her junking the contract.

Varela had to issue a denial. In a letter yesterday to the President, he said: “I categorically deny having made those statements (critical of President Arroyo). My investigations show that the statements attributed to me have been done by parties who may have benefited by the unauthorized use of my name and the organizations I represent,”

“While I subscribe to the liberal economic thinking that government must stay out of the business of running a business enterprise, which is best left to the domain of the private sector, still, I strongly believe in the power of government to regulate business to protect public interest,” he stressed.

In several newspapers that picked up the fake statement, Varela was quoted as saying that President Arroyo’s decision “would surely contribute to the further downgrading of the country’s already negative status as an investment recipient.”

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(First published in the Philippine STAR of December 1, 2002)

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