March 22, 2018, 8:12 am
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Airport expansion review pending

The Department of Transportation (DOTr) said Philippine Airlines (PAL) should first settle its dispute with Philippine Amusement and Gaming Corp. (Pagcor) before it starts a review of the airline’s proposal to expand the Ninoy Aquino International Airport (NAIA) Terminal 2 for P20 billion.

Arthur Tugade, DOTr  secretary, said ideally, any party submitting an unsolicited proposal for an airline project should locate the project in a DOTr property or on land not owned by a third party to avoid legal issues. 

Tugade said PAL should also meet two standards: that the project is in the best interest of the government and in the best interest of the majority.

“(If PAL meets those), then we have created a platform to talk,” Tugade added

PAL had proposed to invest $400 million or P20 billion for the expansion of NAIA Terminal 2 through leasing an additional 16.3 hectares of land adjacent to Terminal 2 aircraft parking which owned by Pagcor.

 The construction of Terminal 2 Annex will dramatically increase the capacity of the terminal from 7.5 million to as much as 20 million passengers per annum starting 2021, according to PAL.

 But Pagcor raised legal issues on the contract saying it is not yet the absolute and registered owner of the property where PAL wants to locate the expansion.

Pagcor had said since it has no absolute authority to lease out the property, PAL does not acquire any right to the possession or enjoyment notwithstanding the contract of lease executed between them.

Pagcor said it is reviewing the lease contract signed by PAL with the casino regulator’s previous management.
But PAL countered it  has a valid lease contract signed by, and mutually executed, with Pagcor in 2014 for the lease of the 10-hectare property located at the old Nayong Pilipino.

PAL under then management of San Miguel Corp entered into a lease contract with Pagcor covering the said property at P40 per square meter until July 11, 2033. 

NAIA Terminal 2, which PAL has been using exclusively since 1999, has far exceeded its maximum capacity as it was originally built as a domestic airport during the Ramos administration. It is servicing 42 million passengers a year compared to its capacity of 30 million passengers.
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