City sees P5B revenue with Dubai firm’s plan-A A +A
Tuesday, June 24, 2014
THE plan by a luxury real estate developer in Dubai to invest in a 10-hectare property in Kawit Island at the South Road Properties (SRP) could earn the Cebu City Government at least P5 billion.
SRP Management Office chief Roberto Varquez said the projected earning of the City is based on Damac Properties Co. LLC purchasing the 10-hectare lot. Damac sent a letter of intent expressing interest to invest in the SRP.
Varquez said the amount will be enough to pay the City’s loan to the Japanese Government for the construction of the 300-hectare SRP.
Based on records of the City Treasurer’s Office, the City still has to pay P3.65 billion of the P7.08 billion principal loan, P1.15 billion of P3.39 billion interest and P180 million of the P736.57 million for the guarantee fee of the SRP loan.
Cebu City started implementing the SRP through a loan from Japan International Cooperation Agency in 1995, with the amount payable until 2025.
Varquez and Mayor Michael Rama said yesterday that although Damac has not yet decided whether to purchase the 10-hectare property or lease it or undertake a project under a joint venture agreement with the City.
Damac earlier said the plan was to develop the 10-hectare Kawit Island into a high-end mixed use project with restaurants, coffee shops and a little marina.
Aside from the possible income that the City could earn, Varquez said yesterday that Damac’s investment at the SRP will place Cebu City in the “map of tourism” worldwide.
He said it will open up a lot of opportunities for the city, which may include direct Middle East flights to and from Cebu.
Varquez said this is the first time that Damac, which is a residential, leisure and commercial developer, will be investing outside the Middle East.
Most of Damac’s projects are located in Dubai, Iraq, Jordan, Lebanon, Qater and Saudi Arabia.
Asked what the City will do with the present structures located in Kawit Island if Damac’s project at the SRP will push through, Varquez said he is proposing that it will be transferred to the 3.2-hectare City Hall block at the SRP.
The present structures at the Kawit Island include, among others, the Sugbu Building, the Senior Citizen’s Office and the office of the Association of Barangay Councils. A huge image of the Señor Sto. Niño is also located in the area.
Rama said, however, that Damac may want to incorporate the buildings on the proposed project at the SRP.
Varquez hopes that Damac’s proposal to invest at the SRP will be supported by the City Council, saying that it will bring many benefits to the city.
Published in the Sun.Star Cebu newspaper on June 25, 2014.