Saturday, January 10, 2009 [ sunstar.com.ph ]
By Linette C. Ramos
FOR the second time, Cebu City’s Joint Venture Selection Committee (JVSC) declared the Cebu Provincial Government ineligible to challenge Filinvest Land Inc.’s (FLI) offer to develop a 50-hectare area of the South Road Properties (SRP).
The JVSC denied yesterday the Province’s appeal for the committee to reconsider its decision declaring the Province as ineligible. It said the Province failed to prove that it has the legal personality, as well as technical and financial capability to handle the project.
In a meeting, the committee approved a resolution denying the Capitol’s request for an appeal, and upheld its earlier decision that the Province cannot participate in the bidding.
After reviewing Capitol’s letter of appeal and additional eligibility documents, the committee agreed that the Province still has not proven that it is a private entity or corporation and that it has the track record, financial capability and technical expertise to undertake the P25-billion joint venture.
The resolution will be submitted to Acting Mayor Michael Rama on Monday for denial or approval. His decision will be final and executory, according to the City’s joint venture ordinance.
“If the mayor approves our recommendation, we also appeal to the Province to put the issue to rest because every single day of delay is costing the City’s taxpayers some P1 million in interest on our SRP loans,” City Administrator Francisco Fernandez said.
Capitol information and revenue generation consultant Rory Jon Sepulveda found the ruling “ironic.”
Sepulveda said the Province merely wanted to offer the City “the best possible price or terms” for the SRP.
But apart from the fact that the Province has been blocked from the SRP venture, Sepulveda lamented that the Capitol is now being blamed for City Hall’s “enormous interest liability”—something that the lawyer said was spawned by the City’s “own folly.”
“It makes one wonder which interest the City is zealously upholding,” Sepulveda said.
Rama told a news conference yesterday he will not make any decision until he receives a copy of the JVSC resolution.
While the committee agrees with the Province’s argument that as a local government unit (LGU) it has corporate powers, it still remains an LGU and not a private entity or corporation, and is therefore not covered by City Ordinance 2154.
Ordinance 2154 is the “Ordinance prescribing guidelines and procedures for entering into joint venture agreements with private entities.”
In their letter of appeal, Provincial Planning and Development Officer Adolfo Quiroga cited provisions of the Local Government Code, which stated that LGUs have a corporate nature and can exercise corporate powers.
“They said they have corporate powers, and we agree with that. But in the provisions they cited, it’s not even mentioned that they are a private entity. The Province is still an LGU. We don’t deny that LGUs have corporate powers, even Cebu City has corporate powers but corporate powers don’t make LGUs a private entity or corporation. And the ordinance covers only private entities,” said JVSC vice chairman Juan Saul Montecillo.
That the Province is citing provisions of the Local Government Code in arguing their case only proves further their being an LGU, the committee members added.
Even the audited financial statements that Capitol submitted are insufficient, since some of the documents are only comments of state auditors on their audit report.
“In other words, the Province has not proven that they have the track record, the money and the expertise to implement the project,” Fernandez said.
Acting City Treasurer Rene Empaces also pointed out that of the 14 technical and financial eligibility requirements, the Province complied with only one, the audit certificates.
“Aside from questions on whether it is a private entity or not, I think it’s more important to note that there are a lot of technical requirements for one to qualify. Of the 14 requirements, only one has been submitted. The committee is compelled to abide by the pre-qualification requirements, and not just one,” she told the committee.
The JVSC, composed of five voting members and four non-voting members and observers, opened their deliberation to media coverage yesterday noon.
If Rama approves the JVSC recommendation, the committee will wait until Jan. 23, or the 30th day after the second publication of the invitation to bid, before the contract for the joint venture is awarded to FLI.
“We will wait for the period of at least 30 days. But we can’t wait too long because we are paying Land Bank an interest of some P1 million a day. The longer we delay this, the longer we will be able to implement the project,” said Fernandez.
He also reminded the committee that once the contract is awarded to FLI, the latter will be paying the City an initial deposit that will be enough to cover the City’s loan payment in February, which amounts to some P330 million.
Fernandez also said that it is still possible for the City and the Province to enter into joint venture agreements covering other areas of the SRP.
Such scenario will not be covered by Ordinance 2154 but by the Local Government Code, which allows joint ventures between two LGUs, provided a public consultation is held.
“We are not questioning that the City and the Province can do a joint venture as provided for in the Local Government Code... but this competitive challenge, I hope they will put it to rest because delays will cost the taxpayers so much. If they’re really sincere about a joint venture, let’s do it under the Local Government Code,” Fernandez added. (With GMD)