Vol. XXII, No. 40 [ BusinessWorld Online ]
Friday, September 19, 2008 | MANILA, PHILIPPINES
CEBU — The Cebu City Council has issued guidelines for joint ventures between the local government and private developers as it speeds up the development of the 300-hectare South Road Properties.
The guidelines allow the city government to evaluate the proposal of Filinvest Land, Inc. for a joint venture with the city in the development of a portion of South Road Properties, said Joel Mari S. Yu, managing director of the Cebu Investments Promotion Center (CIPC).
"This will speed up the process. There has to be a legal basis for anything that the government does. These guidelines provide us with the legal basis to form a joint venture for South Road Properties," he said in an interview.
As soon as the guidelines are published, interested developers may submit their proposals to the local government.
So far, only Filinvest has firmed up its proposal for two contracts. One is the outright purchase for about P2 billion of a 13-hectare lot, which is part of the area considered as the most valuable.
The second deal involves a joint venture with the city government to develop a 35-hectare lot across the first property into a mixed-use commercial center that will include recreational facilities, residential condominium and information technology buildings.
Aside from Filinvest, developers Ayala Land, Inc. and SM Prime Holdings, Inc. have also expressed interest in acquiring separate properties within the 300-hectare reclaimed property, but they have yet to finalize their proposals.
The ordinance containing the joint venture guidelines was approved on Wednesday after the councilors inserted a clause requiring the mayor to seek authorization from the council before entering into a joint venture deal.
Vice-Mayor Michael Rama and several councilors said the guidelines may be amended later if the need arises.
Cebu City Mayor Tomas R. Osmeña sat down with members of the council to discuss the guidelines before the session.
The ordinance defines a joint venture as a contractual arrangement where a company and the city contribute money, capital, services, land or intellectual property.
The South Road Properties is a 300-hectare greenfield development that was reclaimed by the Cebu City government with the assistance of the Japan Bank of International Cooperation.
The Japanese bank extended a ¥12-billion loan through Land Bank of the Philippines.
The area is a special economic zone under the Philippine Economic Zone Authority and was designed for mixed land use that can accommodate manufacturing, commercial, tourism, IT and other service enterprises. — Ghea R.M. Tenchavez