Vol. XXII, No. 123 [ BusinessWorld Online ]
Friday, January 23, 2009 | MANILA, PHILIPPINES
CEBU CITY — Filinvest Land, Inc. is close to getting the contract to develop 50 hectares of a local government-owned prime property that is expected to become the centerpiece of the city’s development and its single biggest growth driver.
The local government joint venture selection committee is expected to endorse to the city council today the award of the contract to the Sobrepeña-led realty developer.
The council will then pass a resolution authorizing the mayor to sign the contract with Filinvest involving the South Road Properties.
Once the Filinvest deal is consummated, the Cebu Investment Promotions Center (CIPC) will pursue negotiations with other prospective investors.
Joel Mari S. Yu, managing director of the CIPC, said he expected two more big investors to buy portions of the 300-hectare land before the year ends.
The only challenger to Filinvest’s unsolicited proposal, the Cebu provincial government, failed to qualify.
"Even if [the provincial government] argues that it has corporate functions, it is still not [part of the] private sector. And the city ordinance provides that the city government can [only] enter into a joint venture with a private entity," Mr. Yu said.
The joint venture selection committee, headed by City Administrator Francisco Fernandez, earlier rejected the proposal of the Cebu provincial government to challenge Filinvest’s proposal.
Aside from the fact that the provincial government is not a private entity, it also failed to meet financial and technical requirements.
The documents it submitted had also failed to show that the financial statements had been audited by state auditors.
The joint venture selection committee, which evaluates unsolicited proposals from the private sector for the development of the South Road Properties, invited other investors to submit a better proposal last month.
The committee will issue the tender documents to eligible parties today.
Filinvest has proposed to develop a total of 50 hectares, or a sixth of the 300-hectare South Road Properties.
The developer will buy about 10 hectares of the prime land and form a joint venture with the city government to develop 40 more hectares.
Filinvest plans to invest P25 billion in hotels and retirement complexes, among others.
The local government reclaimed the South Road Properties with the help of the Japan Bank of International Cooperation, which extended a 12-billion yen loan through Land Bank of the Philippines.
The facility is registered as a special economic zone with the Philippine Economic Zone Authority and was designed for mixed land use that can accommodate light manufacturing, commercial, tourism, information technology and other service enterprises.
The city government signed up its first locator, the Bigfoot Group, two years ago.
The South Road Properties is about five minutes away from the central business district in downtown Cebu City, about 15 minutes from the Cebu International Port and less than an hour away from the Mactan Cebu International Airport. — Marites S. Villamor