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SM reclamation proposal faces ‘Swiss challenge’

October 2, 2013 9:34 pm [ ]

The 300-hectare multibillion-peso reclamation proposal of the property arm of tycoon Henry Sy, SM Land Inc., will likely face potential counterproposals in a Swiss challenge.

Astro del Castillo, First Grade Finance managing director, said in a telephone interview that SM Land may face a competitive set of contenders for the proposed reclamation project off Pasay City.

“We can speculate that other big developers in the country will join the challenge.

Those big developers that are qualified,” del Castillo said, indicating that Ayala Land Inc. and Andrew Tan-led Megaworld Corp. may be some of those developers that will be interested to join the Swiss challenge.

In a notice of unsolicited proposal and invitation for competing proposals, Pasay City administrator Dennis Bernard Acorda said that interested parties for the said challenge are welcome to submit counter-proposals until October 4.

Interested parties should have undertaken and completed a similar reclamation project with an area of not less than 120 hectares preferably within the Manila Bay area, and should have a minimum net worth of P50 billion, the notice specified.

When asked if the SM Group is expecting immediate contenders for the Swiss challenge, Cora Guidote, SM Investments Corp. senior vice president for Investor Relations, only said the firm still “doesn’t know what to expect yet.”

“We are confirming the news. It is based on an unsolicited proposal that is being subjected to a Swiss challenge and handled by the Pasay City government,” Guidote said in a text message.

She did not specy what kind of development the Sy-led conglomerate intends to build in the property if ever it wins the Swiss challenge.

“It’s too early to say [what kind of project SM intends to develop in the area], let’s take it a step at a time,” she further said.

In a public notice, Pasay City Public Private Partnership Selection Committee announced that SM Land submitted an unsolicited proposal offering to develop a 300-hectare reclaimed property located in the western part of Pasay City for P54.5 billion.

According to the notice, SM Land further offered to fully fund the development, including the costs of permits, clearances and other expenses for government and legal requirements.

Of the 300 hectares that will be reclaimed, 153 hectares would be allotted to the Pasay City government. The project, which is proposed to be under a joint venture between SM Land and the Pasay City government, can be completed in seven years from the issuance of the notice to proceed.

Under the Swiss challenge, the government or local government conducts a comparative bidding after it receives an unsolicited project proposal.

Madelaine B. Miraflor

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