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Agency to uphold public interest in John Hay

[ ] January 23, 2012

State-owned Bases Conversion and Development Authority vowed to uphold the public interest in Camp John Hay over the collection of the unpaid debt of lessee Camp John Hay Development Corp.

BCDA president and chief executive Arnel Paciano Casanova, in a letter to CJHDevCo, said it “has no right to ask to rescind the contract and to recover damages from the BCDA.”

He said BCDA has complied in good faith with its obligations.

“In contrast, it is CJHDevCo which has committed material breaches of its undertakings and obligations,” Cassanova said.

He said the developer has defaulted on payments for the John Hay Special Economic Zone, even if BCDA agreed to restructure the debt three times to enable settlement of arrears amounting to P3.024 billion.

Earlier this year, CJHDevCo sent a notice to rescind the 2008 Restructured Memorandum of Agreement, and filed for arbitration.

“As we have consistently maintained in our letters in the past, there is no lawful basis for CJHDevCo to suspend and continue to suspend payment of its rental obligations to BCDA,” Casanova said.

He said non-payment was depriving BCDA of much-needed funds for its operations and contribution to regional development along with Baguio City’s 25 percent share of proceeds of the lease in Camp John Hay.

CJHDevCo claimed that the absence of a One-Stop Action Center was its reason for rescinding the contract but John Hay Management Corp., BCDA’s subsidiary in JHSEZ, said the OSAC has been granting around of 80 permits each year to CJHDEvCo and its locators.

On record, the developer secured 22 permits from the OSAC in 2009, 28 permits in 2010, eight in the first quarter of 2011 and twice attended the OSAC orientations, contradicting claims the center was not in existence.

The lessee’s letter last December 21 said CJHDevCo demanded that BCDA approve 15 permits that are pending with the OSAC with 10 permits for tree-cutting and earth-balling, three for occupancy of the Camp John Hay Suites and two for excavations.

Dr. Jamie Agbayani, JHMC president and CEO, said that only the Department of Environment and Natural Resources (DENR) can issue tree-cutting and earth-balling permits.

“The occupancy permits of the Camp John Hay Suites, on the other hand, were not issued because CJHDevCo committed violations against the New National Building Code and the New Fire Code, which precisely the lessee needs to rectify,” he said.

The original lease contract was signed in 1996 stipulating that the developer to pay the BCDA annual rentals. Dexter A. See

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