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Cebu Capitol faces P125M appeal

Thursday, January 22, 2009 [ ]

CEBU CITY -- The Joint Venture Selection Committee (JVSC) of this city denied the province's motion for reconsideration, which would mean a delay in awarding the P25-billion joint venture contract to Filinvest Land Inc. (FLI).

City Administrator Francisco Fernandez said they will not be able to award the contract to FLI on January 23 because the province was only given seven calendar days to file an appeal based on the city's Joint Venture Ordinance.

The province, however, will be asked to pay a non-refundable appeal fee of P125 million when it files a verified position paper with Acting Mayor Michael Rama.

Instead of treating the province's January 5 letter as an appeal, the JVSC opted to interpret it as a motion for reconsideration, which does not require Rama's approval.

A copy of the JVSC's resolution dated January 9 was delivered to the Capitol last Tuesday afternoon. The Capitol has until January 27 to file an appeal to the mayor, which will result to a 30-day suspension of the selection process.


A Capitol official expressed "genuine puzzlement" over Rama's decision to return the appeal of the Provincial Government to the selection committee.

Lawyer Rory Jon Sepulveda, Capitol information and revenue generation consultant, said they actually submitted their appeal to the Office of the Mayor and not the JVSC.

Capitol officials received a letter Tuesday afternoon from the JVSC, informing them that the Province "is ineligible to enter a joint venture agreement with the Cebu City Government" since it is not a private entity.

City Administrator Fernandez, as JVSC chairperson, signed the letter, dated January 20.

"How are we going to treat this (JVSC's letter)? Some of our lawyers would say this is a mere scrap of paper. Worthless," Sepulveda said.

The Provincial Planning and Development Office immediately sent a letter to Rama and the JVSC secretariat, informing them that their appeal on the committee's recommendation was addressed to the city mayor.

Wait again

Sepulveda said they will just wait for a "formal decision" from Rama on the matter.

In its resolution, the JVSC said the province is not a private entity and "does not have the overall capability for the joint venture undertaking called for in the ordinance with regard to legal, financial, technical and economic parameters."

Mayor Tomas Osmeña said he does not mind the delay but the city has to assure FLI, which made an unsolicited proposal to develop a 50.6-hectare area of the SRP.

"I told them it's okay with me... A week is not material but we have to assure our customer, FLI," he said in a text message sent to Sun.Star Cebu.

But the delays could last a month, since the selection process has to be suspended for a maximum of 30 calendar days while the mayor evaluates the province's appeal.

The developments in the bidding process have left FLI officials agitated, with its vice president for Visayas and Mindanao, Tristan Las Marias, asking if the city is serious in awarding the contract to them.

Huge cost

Fernandez said Las Marias was informed of the development and made inquiries since FLI's irrevocable bank guarantee of P250 million deposited with the city will expire on January 23, the day the JVSC is supposed to award the contract.

"They will have to renew it so Tristan has to go back to his superiors because we have delayed it for a few days. The bank guarantee cost them a lot of money, we are dealing with a big amount here. Their point is, is the City serious in awarding it to them or not, that is his question," he said.

The P250 million represents the proposal security of FLI, as required in the ordinance, which is in the form of an irrevocable bank guarantee, or money in FLI's account they cannot use.

During the Sinulog last Sunday, Fernandez committed to FLI officials that the JVSC will award the contract to them on January. 23 if no other party is declared eligible to challenge their offer.

Fernandez explained the province's letter was treated as a motion for reconsideration, not an appeal, since the letter was addressed to the JVSC and not the mayor.


Also, the province's letter asked for "a motion for a reconsideration/appeal," which the JVSC understood as the Capitol giving them the option to treat it either way.

Under the ordinance, the appeal is addressed to the mayor while the motion for reconsideration is addressed to the JVSC.

As of Wednesday, Fernandez said the province still has not caused any delay in the bidding process since the city cannot award the contract earlier than January 23, or 30 days after the date of the second publication of the invitation to qualify to bid.

"There is a potential delay if they file an appeal because we are given a maximum of 30 days to evaluate their appeal. So far, they have not delayed it, wala pa makalangay ang province because we can't award it sooner than January 23, with or without a challenger," he added. (LCR/With GMD/Sun.Star Cebu)


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