G.R. No. 169914/G.R. No. 174166; April 18, 2008
ASIA’S EMERGING DRAGON CORPORATION, petitioner, vs. DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY LEANDRO R. MENDOZA and MANILA INTERNATIONAL AIRPORT AUTHORITY, respondents.

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS and MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner, vs. HON. COURT OF APPEALS and SALACNIB BATERINA, respondents.

FACTS

These consolidated cases arise from the awarding of the Ninoy Aquino International Airport International Passenger Terminal III (NAIA IPT III) Project to the Philippine International Air Terminals Co., Inc. (PIATCO). The factual backdrop, as established in the prior cases of Agan, Jr. v. Philippine International Air Terminals Co., Inc. and Republic v. Gingoyon, is recounted. In 1993, business leaders formed Asia’s Emerging Dragon Corp. (AEDC). On October 5, 1994, AEDC submitted an unsolicited proposal to the government through the DOTC/MIAA for the NAIA IPT III project under a build-operate-and-transfer (BOT) arrangement. The National Economic and Development Authority (NEDA) approved the project on February 13, 1996. In accordance with the BOT Law, the DOTC/MIAA published an invitation for comparative proposals on AEDC’s unsolicited proposal in June 1996. The Prequalification Bids and Awards Committee (PBAC) issued Bid Documents and subsequent bulletins amending the terms. Key amendments included: a requirement for proponents to share a percentage of gross revenue with the government; that the fixed Annual Guaranteed Payment would be subject to the price challenge; and that for prequalification, a proponent’s financial capability would be measured by proof of availability of minimum equity (30% of project cost) and bank testimonials. During a pre-bid conference on August 29, 1996, the PBAC, upon query from prospective bidder Paircargo, warranted that only the proposed Annual Guaranteed Payment from challengers would be revealed to AEDC, keeping their technical and financial proposals confidential. In September 1996, the PBAC, in Bid Bulletin No. 5, responded to Paircargo’s query about difficulty in meeting the equity requirement by stating that prequalification is based on “present” financial capability at the time of prequalification, not future capability, and that a commitment to infuse capital post-award was insufficient, though the total financial capability of all consortium members established by their audited financial statements would be acceptable.

ISSUE

The primary issue, as framed by the Court’s recounting of the factual background from the Agan case, pertains to the propriety of the bidding process and the award of the NAIA IPT III project to PIATCO, including the specific terms and procedures set by the PBAC in the challenged Bid Documents and Bulletins (particularly regarding financial prequalification, confidentiality of bids, and the price challenge mechanism).

RULING

The Court’s decision in the instant consolidated cases is anchored on its prior rulings. The detailed facts from Agan establish the framework. The Court in Agan ultimately declared the Concession Agreement with PIATCO null and void. The procedural and substantive requirements under the BOT Law and its Implementing Rules and Regulations, as reflected in the PBAC’s Bid Bulletins and actions (such as the insistence on present financial capability for prequalification and the confidentiality rules for the price challenge), formed part of the factual matrix that led to that prior adjudication. The ruling in these new petitions is to be consistent with the findings in Agan and Gingoyon. The Court emphasizes that the fundamental issues regarding the NAIA IPT III project award have already been resolved in those earlier cases.