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BCDA chastises CJHDevCo’s new proposal

Published on 14 July 2012 [ ]
Written by Lovelyn Tuplano, Reporter

The Bases Conversion and Development Authority dismissed as lies the claims of Sobrepena-led Camp John Hay Development Corp. (CJHDevCo) that BCDA has blocked its proposals which promises higher revenues.

“They said they offered to pay government P8.5 billion? That’s a complete lie,” BCDA President and Chief Executive Officer Arnel Casanova said in statement.

He added that, “BCDA never received such upfront offer to pay the said amount.”

CJHDevCo on Monday said in a statement that Casanova rejected the offer it made, which would have given BCDA P8.5 billion in earnings. BCDA and CJHDevCo have been waging a public war over a P3-billion arrear payable by the latter through a lease agreement.

BCDA said that the offer of CJHDevCo, which came a day before BCDA issued the termination of the lease agreement, did not address the question of its P 3billion arrears to the government and sought to drastically change the terms of the bidded out contract.

Supreme Court resolution
The act, BCDA said, has been declared illegal by the Supreme Court in 2003.

“What CJHDevco conveniently forgot to reveal to the public was that its offer was to write off its P3 billion debt to the Filipino people, increase the term of the original 25 year contract to 65 years and change the contract from a lease to a joint venture agreement,” Casanova said.

He added that the BCDA board gave “extraordinary diligence in rejecting such ridiculous proposal and unanimously voted to refuse the offer since it seeks to drastically change the awarded contract and violates the laws on public bidding.”

Casanova added that the BCDA board had no choice but to decline “such patently illegal offer.” Citing a Supreme Court decision over a case in 2003, BCDA said that, “the Court underscored that ‘[a] public bidding would indeed be a farce if after the contract is awarded, the winning bidder may modify the contract and include provisions which are favorable to it that were not previously made available to the other bidders.’”

Casanova also cited as misleading the CJHDevCo’s claim that BCDA would have received P 8.5 billion had it accepted the offer. He said such amount is only a projection and will be realized only in 2061, based on the proposal provided that all business conditions are ideal.

“Based on BCDA’s 15-year collection experience with them, CJHDevco has not been able to substantially deliver on its promised financial obligations under a simple lease contract. How much different would this be if it becomes the government’s joint-venture partner, when BCDA would be subjected to share even in their losses? It is disingenuous for them to state that they have proposed to pay BCDA P8.5 billion when they refused to pay the P3 billion arrears or even the P736 million bond that the RTC [Regional Trial Court] Baguio has ordered them to post,” Casanova said.

He earlier said that the BCDA and CJHDevCo went into an agreement in 1996 but since 1997, the developer has failed to pay lease arrears for the former military camp in Baguio City. On May 15, BCDA terminated the contract citing “material and incurable breaches” committed by CJHDevco in its contractual obligations.

BCDA said that starting 1999, CJHDevCo has given various excuses in order to seek a delay in payment or restructuring of their past due lease rentals, which has reached over P3 billion. Instead of paying the government, CJHDevCo declared dividends to their shareholders.

Casanova said, “CJHDevCo is attempting to put the blame on BCDA by implying that the latter has refused their sincere offers without addressing the fact that their proposal is marred by their own history of defaults and misrepresentations.”

The Manila Times tried to reach CJHDevCo spokesperson lawyer Manuel Ubarra but was told that he was not available.

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