Hong Kong’s Cathay Pacific is facing a different headwind in the Philippines—a current that could force it to abandon inbound and outbound cargo operations in Manila.
Cathay Pacific is embroiled in a legal tussle with local cargo handler People’s Air Cargo and Warehousing Inc., or Paircargo, of controversial businessman Vic Cheng Yong, the founder of Philippine International Air Terminals Co. Inc., or Piatco.
Paircargo sued Cathay Pacific 12 years ago, claiming their existing contract prohibited the airline from engaging other contractors for cargo handling services. The legal case has persisted to the chagrin of Cathay Pacific.
Paircargo in its 2004 lawsuit claimed its existing contract was about to expire in 2007. The cargo handler insisted that its contract should be extended for another 10 years and succesfully obtained a court ruling to maintain the status quo pending the resolution of the case.
Cathay Pacific sought relief from the Court of Appeals, questioning the arbitrary extension of the injunction. The CA postponed action on the lawsuit until the resolution of related cases pending at the Supreme Court.
When those cases at the High Court were finally resolved in 2012, the CA called for mediation proceedings between the parties. The parties after arbitration moved for the dismissal of their case in a regional trial court and executed a settlement and compromise agreement on April 29, 2013. The trial court dismissed the case with finality on July 3, 2013.
The agreement called on Cathay Pacific to continue using Paircargo’s warehouse facilities and services for its import and transit air cargo requirements at the Manila airport up to March 31, 2016. But the same compromise deal allowed Cathay Pacific to accept competitive business proposals for the same services and notify Paircargo of the result of the tender not later than Jan. 29, 2016. Paircargo may participate in the tender.
To make the story short, Cathay Pacific conducted a competitive bidding and assessment and determined that Paircargo’s offer was inferior. Cathay Pacific awarded the warehousing and cargo handling service to another company.
Paircargo surprisingly filed another lawsuit with the same trial court seeking relief from Cathay’s decision to team up with another service provider.
The Hong Kong-based airline cried foul at Pair Cargo’s maneuver, claiming it was a victim of another legal harassment. It also warned that its case might send a wrong signal to the international community on how to conduct business in the Philippines.
The Philippine government should intervene in the legal case as it might indicate its lack of supervision over local and international air cargo policies.
The government government stands to lose around 17 percent of the total international cargo going out of Manila and the same volume of inbound marketing, if Cathay Pacific decides to pull out the operation. Migrant Filipino workers flying on Cathay Pacific will also suffer a flight inconvenience.
Cathay Pacific, according to a source, has notified its worldwide offices that it might stopped inbound cargo to the Philippines in mid-April next year.
New lease on life
Once condemned and left to rot for almost three decades, the historic Army and Navy Club in Manila is getting a new lease on life.
Major restoration works are currently ongoing to save the iconic building, which stands as a silent witness to Fil-Am relations during the early American occupation in the 1900s.
The William E. Parsons-designed structure, which used to be the watering hole of US military officers and servicemen, is being transformed into a plush hotel spa. Oceanville Hotel and Spa Corp., which leased the Army and Navy Club complex from the City of Manila, is doing the massive restoration works that bigger developers have shied away from.
This is not only because of the restoration’s prohibitive cost (experts agree that restoration costs three to five times higher than normal construction)–but also the painstaking research, difficulty in finding technical experts, and regulatory compliance from multiple government agencies that a restorer-developer must to go through.
Oceanville is investing P2.4 billion to bring back the Army and Navy Club to its old glory. The biggest challenge is to rehabilitate the building, repurpose it with modern amenities, without altering its historic appearance.
A new structure behind the hertitage building, meanwhile, is rising. The new building, completely separate from the Army and Navy Club,would be the new home of Casino Filipino when it leaves its current leased premises in Waterfront Pavilion Hotel & Casino Manila.
The new casino building, which occupies a 6,500-square-meter lot within the Army and Navy complex, was sub-leased by Oceanville to Vanderwood Management Corp., a distinct company.
Accusations by anti-gambling advocates that the casino would be inside the Army and Navy hotel, thus, are totally baseless and misplaced. The hotel spa would only house 74 guest rooms, dining areas and wellness and fitness centers. The casino is located in an entirely different building.
Oceanville is being unfairly dragged into the legal and public relations war between Vanderwood, the casino space lessor, and those blocking Philippine Amusement and Gaming Corp. from transferring its casino to a new site. After all, once Waterfront Pavilion loses its anchor client, it may have difficulty finding a productive use for its large hotel floor areas once reserved for gaming.
E-mail: rayenano@yahoo.com or extrastory2000@gmail.com or business@thestandard.com.ph