PIATCO asks SC to raise its award on NAIA 3 case

Published October 9, 2015 9:50pm

The Philippine International Air Terminals Co, Inc (Piatco) has claimed it is entitled to just compensation higher than the over $500 million the Supreme Court recently awarded to it for building the Ninoy Aquino International Airport Terminal 3.

In a motion for reconsideration, Piatco asked the high tribunal to partially reconsider its September 9, 2015 decision.

PIATCO said the SC ought to award attendant costs amounting to $70,197,802.00 and other costs representing depreciation and deterioration, plus a recomputation of interest and reimbursement for some expenses.

The NAIA Terminal 3 was built by Piatco, a consortium which in turn subcontracted Japanese firms Takenaka and Asahikosan for the project in 1997.

Last September 29, the SC, in en banc session, voted 10-0 in favor of Piatco.

Those who did not participate in the voting were Chief Justice Maria Lourdes Sereno, and Associate Justices Antonio Carpio, Mariano del Castillo and Francis Jardeleza. Justice Bienvenido Reyes was on leave.

The high tribunal ruled that Piatco, as the owner of the NAIA-IPT III, shall solely receive the just compensation.

The SC also stressed that "the government shall only have ownership of the NAIA-IPT III after it fully pays Piatco the just compensation due."

Computation of the award by the SC

The amount of just compensation as of Dec. 21, 2004, when the complaint was filed was $325,932,221.26. The SC deducted $59,932,221.26 from that amount, accounting for the "proffered value" which the government had already paid earlier.

The SC said the resulting difference of $267,493,617.26 will be charged with a 12 percent straight interest per annum or $32.099 million a year from September 11, 2006 to June 30, 2013, for a total of $218,450,677.9 million interest for the six years and nine months.

Then from July 1 until full payment, the government will pay an additional 6 percent interest per annum or $16,049,617.0356.

This would mean that as of September 2015, the total amount that the government has to pay to Piatco stands at $521,341,395.7079, accounting to:

- $267,493,617.26 base amount,

- $218,450,677.9 million interest for September 2006 to June 30, 2013, and

- $35,397,100.5479 million interest from July 1, 2013 to September 8, 2014 (day of en banc session).

Depreciation, deterioration, interest

In its ruling, the SC upheld the deductions of $35,076,295.00 for alleged depreciation and $1,738,318.00 for deterioration made in computing for the just compensation to be paid to Piatco.

The SC said adjustments for depreciation should be made in appraising the NAIA Terminal 3, to reflect the differences between the modern equivalent asset and the actual asset or the NAIA Terminal 3.

Piatco however said these amounts should not have been deducted, and instead should be added to the amount of just compensation it would be getting from the government.

Piatco said Republic Act 8974 and its implementing rules and regulations never mentioned “depreciation” or deterioration” when computing replacement cost.

RA 8974 is also known as the "Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and for Other Purposes."

“The financial concept of depreciation is wholly inapplicable in the process of determining just compensation in expropriation. Depreciation is but an accounting concept that facilitates the standard and uniform representation of decreasing asset values in books of accounts,” said Piatco.

PIATCO also said "inequity would occur if PIATCO is not compensated for its attendant costs, which are clearly on top of and separate from NAIA IPT3's base value, and are duly supported by documentary evidence,” said the company.

Piatco added that the 12-percent interest per annum to be paid to the firm should be computed from December 21, 2004 until June 30, 2013.

In its decision, the SC said the 12-percent interest should be computed from September 11, 2006, the date that the Philippine government supposedly took possession of the airport.

But Piatco said the interest should start from the date of actual taking, which is December 21, 2004 when the government filed the complaint for expropriation and actually took physical possession of the NAIA Terminal 3 from Piatco.

Piatco also said the amount it paid for the Board of Commissioners (BOC) expenses, amounting to P2,550,000.00, should be refunded, based on the principle of solute indebiti, which happens when one had paid a debt because he thought he was bound in law to do so, when in fact he was not.

The BOC was created in January 2005 to help a Pasay City Court determine just compensation to be paid by the government to Piatco so the government can finally take over the terminal.

Piatco said the taxes and any other charges that the Bureau of Internal Revenue or any tax authority may find the company liable for the supply and construction of the NAIA Terminal 3 should likewise be added to the computation of just compensation. — ELR, GMA News

Tags: piatco, naia3