Vol. XXII, No. 63 [ BusinessWorld Online ]
Wednesday, October 22, 2008 | MANILA, PHILIPPINES
CLARK FREE PORT — The Clark Development Corp. (CDC) announced yesterday it has cancelled the awarding of a contract to Waterfront Philippines, Inc. to develope and manage the Mimosa leisure estate.
In a statement, the CDC said its board of directors had turned down the request of Waterfront to extend further the deadline to deliver P930 million as stated in their July memorandum of understanding (MoU).
CDC President Benigno N. Ricafort said the free port’s board of directors, in a meeting last Oct. 17, declared the bidding process a failure and decided not to extend the MoU period "on the premise of the new condition on the issuance of a casino license."
He noted that state-owned Philippine Amusement and Gaming Corp. (Pagcor) now wants Waterfront to first pay the arrears of Mimosa’s previous operator, changing the entire ballgame.
Waterfront officials could not be reached for comment.
CDC and Waterfront signed the deal last July 14, with the latter committing to pay the initial sum of P930 million within a 90-day period or before Oct. 11.
However, Waterfront sought a 60-day extension, "or until such time that a legal and binding solution can be worked out with all affected parties," particularly on the matter of a gaming license from Pagcor.
Mr. Ricafort stressed that the conditions that Pagcor had imposed on Waterfront "has materially affected the original terms and conditions imposed by CDC upon any prospective bidder."
He noted that Waterfront, in a Sept. 30 letter to the CDC, emphasized that "the heart of the [Mimosa] estate’s operations lies in the gaming industry, and without clear right to obtain a license that has equal footing on a level playing field with other licenses, the financial viability of the whole project is greatly imperiled."
Mr. Ricafort added: "It is unfortunate that the position now of Pagcor in issuing a casino license to the winning bidder is contingent upon the latter’s settlement of the arrears of the previous operator, which is claimed by Pagcor to be due them."
"This is inconsistent with our issuances in this bidding and previous representations by Pagcor to CDC, and constitutes a supervening event that materially affected the terms of this project," the Clark free port chief said.
Waterfront Philippines, owned by plastics king William Gatchalian, won the bidding for the management and operation of the 215-hectare Mimosa Leisure Estate within the 4,400-hectare former US military facility, amid interest from 10 developers from China, Japan, Korea and the United States as well as local firms.
But there was only one other bidder, Hanwool I and D Corp. of South Korea.
The three-envelope system was applied during the bidding in which only Waterfront qualified. It was explained that during the opening of the first envelopes, the two bidders passed the qualifications.
During the opening of the second envelopes, Hanwool was disqualified due to the lack of the required bidding documents, resulting in Waterfront winning the bid.
The latest bidding was the third attempt since 2003 when no bidder showed up for the auction to privatize the operation and management of Mimosa 10 years after CDC seized the estate from Mimosa Leisure Resort Corp., which had failed to pay lease rentals of some P46 million.
CDC authorities revoked the award of contract to NTM Jin Hung Joint Venture Corp., a South Korean company, in the second bidding conducted in May 2006.
The Mimosa Estate is composed of a 38-hole golf course, a clubhouse, a hotel, a casino, and a restaurant. — Rey Garcia
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