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Bacolod land deal TRO’ed

BY GILBERT BAYORAN [ ] July 25, 2011

BACOLOD – SM Prime Holdings Inc. (SMPHI) has secured a temporary restraining from the Court of Appeals against the negotiated sale and lease of a 7.7 hectare provincial government property here to Ayala Land Inc. (ALI).

The appellate court’s 20th division based in Cebu said the 60-day TRO was issued so as not to make the eventual decision on the case "ineffectual."

SMPHI claimed the July 15 negotiated sale and lease of the property to ALI was invalid as it won a competitive bidding for the same property on July 7.

SMPH said under its July 7 bid, it proposed to purchase portions of the property at P18,885 per square meter and lease the remaining portion at P65 per square meter, or well within the price set by the awards committee.

ALI submitted a bid that effectively offered to purchase the property at P17,000 per square meter, and a lease arrangement of P50 per square meter.

The bids and awards committee declared the July 7 bidding a failure, saying the offers were below the floor price set by the Commission on Audit, and scheduled a negotiated sale and lease arrangement.

SMHPI said there was no "floor price" set when the July 7 bidding was held and added it was tacked on as an afterthought.

SMHPI decided not to join the July 15 negotiations because of the requirement imposed by the awards committee for the participants to issue an undertaking that no legal action will be initiated against the committee and the provincial government.

SMHPI instead filed a petition before Bacolod Regional Trial Court Judge Estefanio Libutan asking that it be declared the winner of the July 7 bidding and that a TRO be issued against Gov. Alfredo Maranon’s decision to enter into a negotiated sale.

Libutan declined to issue a TRO and set the case for hearing.

In its negotiated proposal, Ayala Land improved its offer of P20,500 per square meter for 36,587 square meters up for sale for a total of P749,951,500, inclusive of P25 million for the development of the Capitol Park for the provincial government.

It also entered a lease bid of P73 per square meter a month for 40,481 square meters or P2,914,632 a month escalating by 10 percent every five years over a 50-year lease period.

Business groups, meanwhile, rallied behind Maranon’s decision to award the development to ALI.

The support came in the form of a joint statement issued by Manuel Lamata, president of the United Sugar Producers Federation of the Philippines; Enrique Rojas, president of the National Federation of Sugarcane Planters; Roberto Montelibano, Western Visayas regional governor of the Philippine Chamber of Commerce; Frank Carbon, president of the Metro Bacolod Chamber of Commerce and Industry; John Yap, president of the Southern Negros Filipino-Chinese Chamber of Commerce and Industry, and; Lucio Chua, president of the Northern Negros Filipino Chinese Chamber of Commerce and Industry.

They said the provincial government’s development plan will ultimately boost the business, economic, tourism, technological and historical landscape of Bacolod City.

Provincial board member Patrick Lacson, chair of the committee on government assets, said the provincial government should have been more cautious and prudent.

"This is not an issue of whether SM or Ayala (should win), but the way we treat investors, which must be with respect and care," he said.

"When SM cried out foul, with their disbelief of the way things were done, the least we could have done, especially the provincial council, was to have given them time and transparently heard their side because they deserve our utmost respect," he said.

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