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First conceived in the early 1990’s, Terminal 3 at Manila’s Ninoy Aquino International Airport was supposed to be part of a master plan to give the Philippines a modern, internationally-competitive air transport hub in Southeast Asia. Developed under one of the region’s first Build-Operate-and-Transfer laws, one that had proven remarkably effective in helping the country overcome a critical shortage of electrical power during the term of President Fidel V. Ramos, the centerpiece of the new airport should have been the Philippines’ ticket out of third-world status.
Things did not quite go as planned. NAIA-3’s major investor, the German airport operator Fraport AG, soon found itself in a messy tangle of political and professional rivalries, deceit, corruption, and mismanagement, and to this day – nearly 20 years after the airport project was first discussed, and more than a decade since Fraport became involved – the company has yet to see a single cent of the estimated $400 million it invested in the project. This case study traces the history of the NAIA-3 project and its regrettable aftermath, illustrating a few lessons every company considering investing in developing economies should take to heart.