Agan Jr. Vs. PIATCO 402 SCRA 612 G.R. No.

155001 May 5, 2003 Facts: Some time in 1993, six business leaders, explored the possibility of investing in the new NAIA airport terminal, so they formed Asians Emerging Dragon Corp. They submitted proposals to the government for the development of NAIA Intl. Passenger Terminal III (NAIA IPT III). The NEDA approved the NAIA IPT III project. Bidders were invited, and among the proposal Peoples Air Cargo (Paircargo) was chosen. AEDC protested alleging that preference was given to Paircargo, but still the project was awarded to Paircargo. Because of that, it incorporated into, Phil. Intl. Airport Terminals Co. (PIATCO). The DOTC and PIATCO entered into a concession agreement in 1997 to franchise and operate the said terminal for 21years. In Nov. 1998 it was amended in the matters of pertaining to the definition of the obligations given to the concessionaire, development of facilities and proceeds, fees and charges, and the termination of contract. Since MIAA is charged with the maintenance and operations of NAIA terminals I and II, it has a contract with several service providers. The workers filed the petition for prohibition claiming that they would lose their job, and the service providers joined them, filed a motion for intervention. Likewise several employees of the MIAA filed a petition assailing the legality of arrangements. A group of congressmen filed similar petitions. Pres. Arroyo declared in her speech that she will not honor PIATCO contracts which the Exec. Branch's legal office concluded null and void. Issue: Whether or Not the 1997 concession agreement is void, together with its amendments for being contrary to the constitution. Held: The 1997 concession agreement is void for being contrary to public policy. The amendments have the effect of changing it into and entirely different agreement from the contract bidded upon. The amendments present new terms and conditions which provide financial benefit to PIATCO which may have the altered the technical and financial parameters of other bidders had they know that such terms were available. The 1997 concession agreement, the amendments and supplements thereto are set aside for being null and void. The petitioners have local standi. They are prejudiced by the concession agreement as their livelihood is to be taken away from them.