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BCDA loses appeal vs decision favoring SM Land

Posted on April 16, 2015 10:39:00 PM [ BusinessWorld Online ]

THE BASES CONVERSION and Development Authority (BCDA) has lost its appeal against the Supreme Court’s decision to uphold the unsolicited proposal by the SM Group’s property arm to develop a 33.1-hectare property at Fort Bonifacio.

In a recently released 13-page resolution dated March 18, the high court’s Special Third Division denied the motion for reconsideration filed by BCDA and its President and Chief Executive Officer Arnel Paciano D. Casanova.

This action affirms with finality the high court’s August 2014 ruling ordering BCDA to proceed with the process of entertaining SM Land, Inc.’s (SMLI) unsolicited proposal, the termination of which was challenged by the property company.

It also finalizes as permanent the Jan. 9, 2013 stay order blocking the BCDA’s plan to discard the process of subjecting the proposal to Swiss challenge in favor of public bidding.

In affirming its August 13, 2014 decision with finality, the division through Associate Justice Presbitero J. Velasco stated that “no further pleadings, motions, letters or other communications shall be entertained in this case.”

The resolution nixed BCDA’s argument that there was no existing agreement binding it to enter a joint venture with SM Land and giving the company the right to demand the conduct of the Swiss challenge.

Instead, it gave weight to the Certification of Successful Negotiations signed in 2010 by former BCDA President and CEO Gen. Narciso L. Abaya, considering it a valid contract which SM Land can expect to be honored.

The high court also rejected BCDA’s claim that the reservation clause provided by Article VIII of the terms of reference allowed it to terminate the Swiss challenge and resort to public bidding.

The provision stated the BCDA has the right to call off the property’s disposition and instead conduct a new process without any liability to private sector entities (PSEs).

But the high court noted that, since the provision referred only to PSEs and not SM Land itself, the particular clause did not provide any basis for the cancellation of the entire procurement process.

It also said that estoppel against the government-owned corporation could be invoked, disallowing it from terminating the agreement it already concurred in.

“This is in view of the fact that despite BCDA’s repeated assurances that it would respect SMLI’s rights as an original proponent, and after putting the latter to considerable trouble and expense, BCDA went back on its word to comply with its obligations under their agreement and instead ultimately canceled the same,” the resolution said.

The court division added perceived losses on the part of the government remained speculative, saying it did not award the contract to SM but only ordered it subjected to the Swiss challenge.

“There is, thus, an opportunity to increase the price, the government share as it were, through competitive challenge, as respondents themselves previously observed,” the decision noted. “Without first subjecting SMLI’s proposal to a competitive challenge, no bid can yet be obtained from PSEs.”

Mr. Casanova previously said BCDA could achieve its appraised price of P78,000-P100,000 per square meter through public bidding. SM Land’s offer sets a price of P30,000 per square meter. -- Vince Alvic Alexis F. Nonato                
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