May 24, 2011 / 10:41 AM / 8 years ago

Court awards Manila airport contractor compensation

MANILA, May 24 (Reuters) - A Philippine court has awarded compensation to the local contractor of a controversial airport terminal in Manila, but the amount was much less than sought which the government said was a good sign as it tries to end the long-running dispute.

Terminal 3 at Manila’s international airport has been embroiled in legal disputes between the government and its contractors, Philippine International Airport Terminals Co. Inc. (PIATCO) and German airport operator Fraport .

The dispute has raised questions about the investment environment in the Philippines. The government that took office last year wants to resolve the case, as it is preparing to pitch billions of dollars on infrastructure projects to investors.

A court in Pasay City, the Manila region where the airport is, granted PIATCO compensation of $176 million for the construction of the terminal, well short of the $846 million it had sought.

“The claim for attendant cost by defendant PIATCO is baseless and unfounded,” the court said in its decision, dated May 23. “Clearly, what defendant PIATCO actually lost was merely the value of the property condemned.”

Terminal 3, with a capacity of 13 million passengers, was scheduled to be in service in late 2002 but has only been partially opened due to the disputes between the government and the consortium that built and was to operate it.

President Benigno Aquino’s spokesman, Edwin Lacierda, welcomed the ruling, saying the compensation was much closer to the government’s position of $145 million.

“It brings us one step closer to resolving the long-entangled sage of terminal 3,” he said

Fraport has recently made a fresh attempt to get more than $425 million in compensation from the government. [ID:nLDE7300LS]

Aquino has said he wants the dispute resolved this year to cope with growing passenger traffic and soothe investors’ concerns over legal uncertainties in the country. [ID:nL3E6MI0OL] (Reporting by Manny Mogato; Editing by John Mair and Muralikumar Anantharaman)

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