by Rey E. Requejo
[ manilastandardtoday.com ] January 12, 2012
The Baguio City-based developer of Camp John Hay has filed a formal rescission of its July 2008 Restructuring Memorandum of Agreement with Bases Conversion and Development Corp., citing noncompliance in the undertaking.
As a result, Camp John Hay Development Corp. removed from the board BCDA directors Dean Santiago, lawyer Nena Radoc, Elmar Gomez and Ma. Asuncion Garcia.
In its Jan. 9, 2012 letter to president and chief executive Arnel Casanova, CJH Devco president Ferdinand Santos, demanded BCDA’s compliance, specifically to establish and maintain a ‘One Stop Action Center’ with the “full authority to process and issue all business, building and other developmental permits, certificates and licenses, local and national, from all government agencies necessary to facilitate the construction and commercial operation of Camp John Hay,” special economic zone.
The restructuring covered the installation of the four BCDA directors and assumption of “prior rental obligations” amounting to more than P2.69 billion and current rental of P150 million among other concessions.
In good faith, Santos said CJH Devco has deposited in escrow at Philippine Veterans Bank, the amount of P97.3 million, representing the proportionate rental as defined in the restructing memorandum along with a bank certification attesting to such deposit.
He said BCDA has not responded to its Dec. 21, 2011 formal demand letter, just as it had stood pat on previous letters on the latest proposed settlement.
Santos said several restructurings in the past were due to material breaches of BCDA.
“All these combined restructurings have resulted in more than 10 years of lost business opportunities and significant losses for CJH Devco, which is the real victim,” he said.
According to Santos, CJH Devco in October 1996 upon winning the bid and signing the lease agreement, it paid P250 million in advance to BCDA.
In October 1997, CJH Devco paid P425 million in rental obligations to BCDA despite the ‘non-issuance’ of the Environmental Clearance Certificate by the Department of Natural Resources as well as BCDA’s delay in delivering 32 hectares of the leased area, he noted.
It was only in Jan. 1998 when the ECC was given at the onset of the Asian Financial Crisis.
Santos said BCDA in May 2000, or about four years after the original lease agreement was signed, offered the Voice of America property in exchange.
“To date, the OSAC was never set-up or fully-operational as envisioned in the agreement. This can be proven by the documentation between CJH Devco and BCDA over the years where CJH Devco has consistently been calling the attention of BCDA on its continued default in setting up a fully operational OSAC. In fact, there are currently over fifteen (15) existing projects requiring various permits such as the CJH Suites occupancy permit within Camp John Hay which have been pending now for over a year.”
Santos said the restructuring agreement in July 2008 after the Special Economic Zone status was restored by Congress was again violated by BCDA.
“It is noteworthy to mention that since 1996, CJH Devco has actually paid BCDA approximately P1.4 billion in cash and properties, and has pumped in more than P2.6 billion in investments and improvements,” he said.
“Simply put, CJH Devco could not raise the revenues to pay the rental payments due to BCDA’s inability to deliver what it committed to. Obviously the formula isn’t working… the ‘Lessor-Lessee’ relationship isn’t working …three (3) restructurings have been done but BCDA was unable to comply.”
Santos said CHJ Devco would continue suspending payment of rental obligations pending the BCDA’s compliance with its obligations.