"NEGOTIATED SELLOUT"
Cuenco, Gullas, Salimbangon back House probe on Cebu City-FLI deal
Sun.Star Cebu, Apr 21, 2009
REPRESENTATIVE Pablo John Garcia (2nd District, Cebu Province) made good yesterday his vow to bring to Congress the controversy over Cebu City’s joint venture agreement with Filinvest Land Inc., calling it a “negotiated sellout.”
In his privilege speech at the House of Representatives, Garcia asked for the holding of inquiry that would:
• Set parameters within which local government units may enter into join venture agreements with the private sector;
• Provide for stricter compliance with the requirement for congressional approval in the sale of lands of the public domain; and,
• Provide stiffer penalties for violation of Section 3, Article XII of the 1987 Constitution, on the disposition of lands of the public domain.
...
Speech
Garcia’s speech reiterated the criticisms he raised against the agreement in previous press conferences and press statements.
“Never have I seen a relationship where one party is as committed to bleeding the other dry, and the other doesn’t complain, but calls it unconditional love,” he said.
He said the contract signed by the parties in the transaction deviated from what was stated in the published invitation to bid not on a few points but “on all material points.”
Among these points were:
• Instead of an unincorporated joint venture over 50.6 hectares, the deal provides for an outright sale of 10.6 hectares to Filinvest, and only 40 hectares for the joint venture.
“Its purpose is clearly to evade the ‘sealed public bidding’ requirement under Section 197 of the Commission on Audit Rules and Regulations in regard to the sale of properties belonging to local governments,” Garcia noted.
• Instead of a ‘central business district type’ of development, the agreement shifted to the cheaper ‘integrated and well-planned clusters of medium-rise residential buildings and retirement and congregate care complexes.”
• In the published terms of the bidding, Cebu City claimed Filinvest had committed to pay P1.5 billion within the first three years.
In the agreement, Filinvest would pay the city not in three years but in seven annual installments or “double the term originally committed and published.
Other points
Aside from the deviation, Garcia also noted the following:
• Under Section 4 of the agreement, the city agreed that the master development plan, which Filinvest has not submitted, may be changed anytime by the firm without approval from the City, but upon mere 90 days notice.
• Under the agreement, Filinvest gets piecemeal titles to two hectares of property upon payment of each installment of P300 million or so.
“If Filinvest decides on the second year to stop paying further installments, no problem. It already holds the title to two hectares which it could then sell, if it has not sold it already,” Garcia said.
Moreover, Section 20 of the agreement provides that after payment of the fifth installment, Filinvest shall already have taken “delivery of the titles to entire object of the sale,” with P448.5 million still unpaid.
• Section 23 of the agreement provides that “expenses relative to the registration and transfer of ownership from local government to the vendee shall be borne by the vendee.”
For a P1.5 billion transaction, this could add up to P112 million, Garcia said.
• The City also agreed to secure and assign all foreshore rights to Filinvest without demanding a single centavo by way of compensation or even reimbursement expenses.
• Cebu City, under the agreement, contributes not only 40 hectares of supposed prime property for joint venture but will also spend for the road network, drainage system and provision for utilities like power and water.
Even with this, Garcia said, the city would only get “a measly 10 percent share of the proceeds.”
Also, if the share is sold, the city does not receive its entire value, as it committed to pay Filinvest 7 percent in “sales commissions and marketing expenses,” he added.
• “How can the City of Cebu sell reclaimed land without the authority of Congress?” Garcia said, citing a Supreme Court ruling requiring congressional authority for local government units to sell reclaimed lands of public domain.
full article:
Sun.Star Network Online | Your Source of Philippine Community News