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SM bags Pasay reclamation deal

Posted on November 28, 2013 09:34:33 PM [ BusinessWorld Online ]

SM GROUP has bagged the P54.5-billion deal to reclaim some 300 hectares of land in Pasay City, signing the joint venture deal with the local government in the middle of this month, a city official said yesterday.

“We signed the joint venture agreement with SM Land, Inc. last Nov. 15, and we submitted the joint venture documents to PRA (Philippine Reclamation Authority) last Nov. 19,” City Legal Officer Serevino C. Madrona, Jr. said in a telephone interview.

“So, the Swiss challenge is over,” noted Mr. Madrona, a member of city’s Public-Private Partnership Special Committee tasked to facilitate the bidding process.

This means that SM Land will be the official partner of the city government for the reclamation of 300 hectares in the Manila Bay area, he said, adding that the contract signing proceeded since no one was able to challenge the proposal in time.

“The Swiss challenge was simple. They (challengers) just have to top SM’s offer, particularly the cost and the share of the city government or PRA,” Mr. Madrona said.

SM Land offered to shoulder the entire cost of the project, which the firm promised to complete within seven years from issuance of the notice to proceed.

As part of its proposal, the company has also reserved 153 hectares or 51% of the area for the Pasay City government or PRA.

Ayala Land, Inc.; GT Capital Holdings, Inc.; and S&P Construction Technology and Development Co. bought bid documents but did not summit counterproposals by the Nov. 4 deadline for submission, largely due to questions on project terms.

Asked for comment, Dindo R. Fernando, Ayala Land assistant vice-president for external affairs, said via text yesterday: “It will be unfortunate if Pasay indeed proceeded despite unresolved issues,” but would not say if the company would take the issue to court.

Officials of S&P Construction were not immediately available for comment, while a senior executive of GT Capital said the company has yet to decide on its next move.

Mr. Madrona said his office had “already considered all legal challenges.”

A statement yesterday quoted him as saying some arguments against competition terms “were misplaced.”

“The Pasay City government today maintained that the procedure it followed in selecting a joint venture partner for the proposed reclamation of 300 hectares of foreshore lands in the city was legal and above board,” the statement read.

Mr. Madrona said the city government is now awaiting PRA’s advice.

“The PRA board has yet to approve it (reclamation proposal) and then it will go through relevant government agencies for evaluation,” he said.

“This is quite a long process.” -- Cliff Harvey C. Venzon       

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