Posted on October 23, 2013 10:43:48 PM
[ BusinessWorld Online ]
A MULTIBILLION-PESO project to reclaim
land in Pasay City may turn out to be an arena where two of the country’s
biggest property developers will compete.
Listed Ayala Land, Inc. plans to challenge SM Group’s P54.5-billion bid
to reclaim a 300-hectare (ha) area in Pasay City, pending resolution by the
local government of some of the former’s concerns.
In a letter to Pasay City Mayor
Antonio G. Calixto, dated yesterday and copy-furnished Socioeconomic Planning
Secretary Arsenio M. Balisacan and Public-Private Partnership (PPP) Center
Executive Director Cosette V. Canilao, Ayala Land Corporate Secretary Solomon
M. Hermosura said his company was keen on submitting a counter-offer.
“This (letter) will confirm our
interest to submit a counter-proposal,” Mr. Hermosura wrote in the letter, a
copy of which was distributed by the company to reporters.
The Pasay City Administrator’s Office
last month published a notice soliciting counter-offers for the unsolicited
proposal of SM Land, Inc. which called for “a joint venture” with the city
government “to undertake the raw land reclamation and horizontal development of
300 ha, more or less, of foreshore and offshore areas of Manila Bay located at
the western part” of the city’s jurisdiction.
The notice summarized SM Land’s
proposal as follows:
• reclamation and development of the
area;
• financing of the project, including
cost of all necessary permits and clearances from relevant government agencies;
• allocation of 153 ha or 51% of the
area for the Pasay City government or the Philippine Reclamation Authority; and
• completion of the project seven
years after issuance of the notice to proceed.
According to the notice, interested
entities should have undertaken a similar reclamation project with an area not
less than 120 ha “preferably within the Manila Bay area and should have a
minimum capital of P50 billion.”
Counter-proposals should be submitted
with the City Administrator’s Office by Nov. 4.
CONCERNS
Mr. Hermosura, in the letter, asked
for an additional 60-day extension of the deadline.
“Kindly note that Republic Act No.
6957 (Build-Operate-Transfer Law) provides a minimum period of 60 working days
for the submission of competitive proposals,” the letter read. “Given the
estimated P54.5-billion cost of the project, we need more time to study the
issues and prepare a competitive counter-proposal.”
Pasay City legal officer Severino C.
Madrona, Jr. said Ayala Land’s concerns will be studied. “Ayala Land’s letter
was received by our office at around 11 a.m. today,” Mr. Madrona said in a text
message. “The city will formally answer Ayala’s query in writing as soon as
it’s been discussed by our PPP officials.”
Ayala Land also asked for the reason
behind the requirement that a proponent should have undertaken a similar
project of not less than 120 ha. “What is the purpose of this particular
requirement?” the letter read. “Please bear with us on these questions and
provide us information on your application of the requirement because the
principle of ‘opportunity for public competition’ has to be observed in
processing the unsolicited proposal ‘to protect the public interest by giving
the public the best possible advantages through open competition.’”
Mr. Hermosura also asked if the
P5-million non-refundable bid document fee could be reduced or waived “in the
interest of the right to public information.”
Mr. Hermosura argued the fee was
higher than those of other PPP projects.
“We believe the fee is significantly
higher than what was required in other PPP projects,” the letter read.
“The government can only benefit from
having as many interested parties as possible and setting a prohibitive fee can
discourage capable bidders from participating,” it added.
“Moreover, public access and scrutiny
of the unsolicited proposal cannot be barred through the imposition of a
prohibitive fee.”
Neither PPP Center officials nor those
of companies involved were immediately available for clarification.
SM Group owns Mall of Asia Complex, a
42-ha mixed-use development on a reclaimed area in Pasay City near Manila Bay.
Ayala Land ended the first half with a
net income of P6.62 billion, up 23.28% from P5.37 billion a year ago.
This as revenues rose 35.67% to P36.63
billion from P27.0 billion, while cost and expenses increased by 39.00% to
P27.51 billion from P19.79 billion.
SM Land, meanwhile, is a privately
held company by the Sy family, which recently bagged an approval to merge with
SM Prime Holdings, Inc. as part of a consolidation effort under the listed mall
builder and developer.
Yesterday, shares of Ayala Land shed
20 centavos or 0.65% to close P30.40 apiece yesterday from P30.60 last Tuesday,
while those of SM Prime gained 52 centavos or 3.09% to P17.36 each from P16.84.
-- C. H. C. Venzon
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