German government compensates Fraport for Manila investments

Nicole Mezzasalma

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The airport operator will receive €41.9m ($67m) under the German Investment Guarantee Programme

Airport operator Fraport has announced it is to receive €41.9m ($67m) from the German government as part of the federal investment guarantee programme for capital investments abroad. The company said it signed the guarantee contract as “protection against political risks” for its equity investment in the Philippines. The amount can be increased by a further €3.9m ($6.2m), if certain requirements are met, depending on the outcome of the legal proceedings Fraport is pursuing against the Philippine government.

Fraport and its joint-venture Philippine International Air Terminal Corp (PIATCo) are currently chasing compensation at national and international courts after a dispute over the control of retail revenues at Manila Ninoy Aquino International airport’s terminal three resulted in PIATCo pulling out of the project in 2003. Fraport said it already made a complete write-down on its investment in Manila in the fiscal years 2001 and 2002, and received a first payment of about €27m ($41.4m) in 2006.

Fraport executive board chairman Wilhelm Bender said: “This is only the first step. The unlawful behaviour of the Philippine government will not pay off. We will not accept the expropriation done and we will get our money back for our engagement in the Philippines.”