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BCDA junks Sobrepeña’s plan

Posted May 17th, 2012 by Manila Standard Today 

The state-run Bases Conversion and Development Authority has turned down the proposal of Sobrepeña-led Camp John Hay Development Corp. for a lease payment plan for being grossly disadvantageous to government.

The company submitted a proposal on May 14 for a joint venture with BCDA on future projects. This includes the remaining developable area at the John Hay special economic zone.

CJHDevco proposed to pay P100 million upon signing of a new agreement, calling it “advance rental.”

BCDA president and chief executive Arnel Casanova said the proposal seemed to imply that the lessee was up to date with its payments up to 2011.

The BCDA, in a special board meeting on Tuesday, rejected the proposal, since it does not show how the P3-billion arrears will be settled and it seeks to change the bid terms and extend the contract until 2061.

“This is in violation of the original lease agreement,” said Casanova.

“The extension they are asking is contrary to law. Other conditions they are asking are also beyond the control of BCDA, such as DENR’s [Department of Environment and Natural Resources] granting of permits,” he said.

The proposal is CJHDevco’s latest offer in a history of restructuring agreements undertaken to save the project at the John Hay Special Economic Zone.  “However, it is now evident that this is just another ploy of CJHDevco to delay or even evade compliance of its obligations,” Casanova said.

Casanova said CJHDevco had already been given opportunities to settle their arrears as far back as December 2011. “But instead of paying, they arbitrarily rescind the 2008 restructuring memorandum of agreement and threw out the BCDA directors from their board,” he said.

He said there was no indication how the funds will be sourced to pay the P3-billion obligation and CJHDevco had been secretive through the years of revenues generated from John Hay.

“Based on the narrative, it even seems that its arrears are no longer being recognized by CJHDevco,” Casanova said.

“This is farthest from the truth,” he said, adding that CJHDevco has acknowledged its billions of arrears during the signing of the 2008 restructuring memorandum of agreement.

The alleged “better revenues for BCDA” that CJHDevco proposed will come from the proposed new joint venture and extension of the lease period up to 2061.

Casanova said, however, CJHDevco had a history of defaulting on its obligations and engaging in fraudulent transactions of which BCDA was a victim.

(Published in the Manila Standard Today newspaper on /2012/May/17)
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