Cebu govt bid on Filinvest project rejected once more

Business Mirror
Sunday, 11 January 2009 21:41

THE Cebu City government on Friday rejected for the second time the provincial government’s bid to challenge the unsolicited proposal of Filinvest Land Inc. (FLI) to develop 60 hectares of the reclaimed South Road Properties.

With no other challenger signifying intention to challenge FLI, the property development firm is scheduled to be formally awarded with the project on January 23.

However, the governor’s spokesman, Rory John Sepulveda, told the BusinessMirror that the Capitol has yet to receive the formal decision of the joint venture selection committee (JVSC) of the city government.

“The governor, the provincial board and the economic affairs team will surely talk about it and decide our next course of action,” Sepulveda said.

The JVSC, in its resolution, said the Capitol still failed to prove that it is a private entity, that it has the track record to undergo a huge development, and it has the financial capability for big-ticket projects, as provided by the city’s own joint venture ordinance and National Economic and Development Authority rules on unsolicited proposals.

Commitee chairman and city administrator Francisco Fernandez said the committee’s decision will be sent to Acting Mayor Michael Rama for final approval. Pending any appeal from the Capitol or a rejection by Rama, Fernandez said it is logical for Filinvest to be declared winner.

Sepulveda criticized the JVSC for releasing the results of the meeting even before sending the matter for final approval of the acting mayor.

“They themselves admit they are only a recommending body and the final decision rests upon the head of office [mayor], yet they immediately went public with their decision as if it was already final,” Sepulveda said. “If this is how things are run at City Hall, then it is not in accordance of good taste.”

With the rejection of the Capitol, the city government plans to formally award the project to FLI by next week.

In its original proposal, FLI plans to buy the 10 hectares for P2 billion, or about P20,000 per square meter. The remaining 50 hectares will be developed through a joint venture with the city, with the local government getting revenue shares or cash income, whichever is higher. Tristan las Marias, Filinvest’s vice president for the Visayas and Mindanao, said the company’s investment in the property could reach P80 billion.

Cebu Gov. Gwendolyn Garcia and Mayor-on leave Tomas Osmeña has had a public quarrel since 2005 after the collapse of a land swap deal between the two government units.

The province was supposed to give up its claim to 50 hectares of prime property inside the city in exchange for vacant lots at the north reclamation area. The deal, however, collapsed after the government units disagreed on the values of their respective properties.

The province pushed to recover the 50 hectares, planning to make business through joint ventures with private firms.

The mayor vowed to block the recovery and the city council issued a moratorium on developments over districts where the provincial lots are located, effectively stopping the Capitol’s projects,

The SRP, completed in 2001, was built through a loan obtained by the city government with the Japan Bank for International Cooperation. The loan is payable up to 2020