Capitol awards Lahug project to major property developer

Tuesday, February 14, 2012

CAPITOL has awarded a P2-billion project on a provincial lot in Cebu City to property developer Filinvest Development Corp.

Cebu Gov. Gwendolyn Garcia gave Filinvest two weeks to show its commitment and capability to build four towers that will house offices of business process outsourcing companies along Salinas Drive, Cebu City.

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The governor, in the notice of award, told Filinvest vice chairman Andrew Gotianun Jr. that the company’s bid was found to be the “most responsive bid and advantageous to the interest of Cebu Province” by the Economic Enterprise Council (EEC).

The EEC rejected the bids of two other companies, Ayala-affiliate Cebu Holdings Inc. and Vicsal Development Corp. of the Metro Gaisano group.

Earnings

The Province offered the development of a 1.2-hectare property that used to be the site of the Cebu City jail and drug rehabilitation center.

From the project, Capitol aims to earn P86.1 million a year in rent and a share of P115.3 million from Filinvest’s earnings.

Rent on the lot is meant to increase five percent every year.

At the end of the lease contract, developments made on the lot will be transferred to the Provincial Government.

Part of showing “commitment and capability” to the project is for Filinvest to present a certification from a bank that will extend a credit line of about P1.7 billion to the developer.

The amount is equivalent to the total cost of the proposed improvement of the lot, according to the letter of award from the Capitol.

The governor said Filinvest will be informed later on the dates of submission of other requirements before the signing of the contract for the project.

EEC member and Capitol spokesperson Rory Jon Sepulveda informed Filinvest about the notice of award by phone.

Filinvest proposed to build three 18-level towers and a 10-storey building on the Capitol lot.

The EEC is chaired by the governor with Vice Gov. Agnes Magpale as vice chairperson.

EEC has five Provincial Board members, six department heads and two consultants.