Pay P24-B debt, COA tells MIAA

THE COMMISSION on Audit has reprimanded the Manila International Airport Authority (MIAA) for delaying the payment of $531 million (P24.5 billion) in just compensation plus interest to the builder of Ninoy Aquino International Airport Terminal 3 despite a final Supreme Court ruling in April.

The COA warned the MIAA the interest due would continue to increase while it delayed paying Philippine International Air Terminals Co. (Piatco).

Last April, the Supreme Court unanimously affirmed its September 2015 decision ordering the government to pay Piatco $531 million for its expropriation of Naia Terminal 3, rejecting the solicitor general’s appeal to lower the compensation.  The high court also ordered the government to pay interest of about $16 million (P720 million) annually until full payment was made.

Total interest from September 2006 up to April 2016 has reached $263.7 million (P12.15 billion).

“(W)e recommended that MIAA determine and recognize in its books the impact of the Supreme Court ruling… particularly on the probable outflow of resources to settle this obligation,” the COA said in its 2015 audit report on the airport operator.

The MIAA which was headed by former President Benigno S. Aquino III’s cousin, retired Air Force Gen. Angel  Honrado, had reasoned that the airport authority was never involved in discussions on the case, “thus the MIAA cannot resolve on its own the issue on whether the national government or the Authority should pay Piatco.”

Honrado suggested that payments should come from the national government, adding that the national government would have full ownership over Terminal 3 upon payment of full compensation.”

He further argued that the MIAA was waiting for word whether or not the Supreme Court would allow a second appeal from the solicitor general.

But the COA reminded the MIAA that as operator of Terminal 3, it had initially recognized in its books the proffered value of the airport terminal and the escrow deposit for payment, as well as related arbitration expenses and improvements done on the facility.

“Thus the asset and the probable outflow of resources to settle the obligation would eventually be recognized in MIAA’s books of account.

“There is already a strong degree of certainty as to the ultimate conclusion of the matter,” the audit body added.