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John Hay again behind in payments

BY IRMA ISIP
[ Malaya.com.ph ] May 3, 2011
Camp John Hay Development Corp. (CJDHDevco) again failed to pay lease rentals amounting to P272 million over the 18-month period ending March 2010 out of total obligations of P2.4 billion, an official of the Bases Conversion and Development Authority (BCDA) said.
Dean Santiago, BCDA resident chief for planning and business development, said that last Friday the agency wrote CJHDevco to demand payment for rents that had piled up from September 2009 to March 2011.
The SoprepeƱa family-held CJHDevco won the contract to develop the 247-hectare Camp John Hay in Baguio City into a special economic zone when some military bases where privatized during the time of President Fidel Ramos.
If CJHDevco fails to come up with the payment by June, the due and demandable amount would balloon to P381 million, including P72 million in unpaid interest payments for 2010 alone, Santiago said.
He said CJHDevco has also failed to put up an escrow account for the lease contract as required under the 2008 Restructured Memorandum of Agreement (RMOA) with BCDA.
Santiago said BCDA has almost exhausted all options for a mutually acceptable solution to the standoff, including three restructuring agreements over a nine-year period.
Santiago dismissed denials from interests related to CJHDevco that the latter owes P2.686 billion, inclusive of interest, to BCDA.
Santiago said CJHDevco expressly acknowledged its indebtedness to BCDA under the 2008 RMOA.
Santiago said that of CJHDevco’s acknowledged debt of P2.686 billion, it paid BCDA P100 million upon signing of the 2008 RMOA.
He also said that CJHDevco paid BCDA P180 million by way of dacion en pago of various properties.
"This brings CJHDevco’s debt to government to P2.4 billion," Santiago said.
Santiago said P2.4 billion represented CJHDevco’s unpaid pro-rated rental dues from 1999 to June 30, 2008, when the lease contract was last restructured.
Under the RMOA, CJHDevco was obligated to pay the BCDA the P2.68 billion over a 15-year period, with a three-year moratorium.
"This means that CJHDevco will pay BCDA the amount of P419 million starting 2011 to 2023 on a diminishing balance," Santiago said.
Santiago said BCDA has its own commitments to the local government of Baguio City, but compliance is contingent on CJHDevco’s settlement of its financial obligations.
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