Rama ‘can sell SRP’

-A A +A

Tuesday, August 12, 2014


TWO years after passing an ordinance that requires Cebu City Mayor Michael Rama to get City Council approval before negotiating with prospective buyers and investors at the South Road Properties (SRP), five city councilors allied with the Bando Osmeña Pundok Kauswagan (BOPK) now want the mayor to sell a 45.2-hectare SRP lot.

The councilors include Noel Wenceslao, who authored Ordinance 2332, which the council passed in July 2012.

Rama had vetoed the ordinance, but the majority got enough votes to override his veto.

Advertisement

Councilors Hanz Abella, Mary Ann de Los Santos, Dave Tumulak, James Cuenco and Philip Zafra of Team Rama and councilors Wenceslao, Gerardo Carillo, Roberto Cabarrubias, Eugenio Gabuya Jr. and Richard Osmeña of BOPK filed a resolution that seeks to authorize the mayor to negotiate for and in behalf of the City Government and dispose of the property by sale through public bidding.

They are proposing to sell the 26-hectare Lot No. 8, where the templete of San Pedro Calungosd stands, and the consolidated Lot Nos. 7 and 17 with a lot area of 19.2 hectares.

The City Government stands to earn P12 billion if the property is sold. The City set the selling price at P20,000 per square meter.

Sale of Cebu SRP lots
SALE OF SRP LOTS. Ten councilors, five of them with BO-PK, have filed a joint resolution authorizing Mayor Michael Rama to sell 26 hectares of Lot No. 8. where the templete of San Pedro Calungsod stands (upper right of photo), and the 19.2 has. of two more lots at the South Road Properties. At P20,000 per square meter, sale of the lots can earn P12 billion for Cebu City. The properties in contention are near the SM mall, the ongoing construction of which is shown here. (Sun.Star Photo/Jayjay Neri)


Purpose

The councilors said the proceeds of the sale will help fund the construction of the new Cebu City Medical Center (CCMC) and a venue for major events like the Asia-Pacific Economic Cooperation (Apec) in 2015 and the International Eucharistic Congress (IEC) in 2016.

The sale will also allow the City to upgrade the traffic system, drainage and storm water catchment system and other priority infrastructure projects, they said.

Asked why they decided to propose the resolution, two BOPK councilors said the City’s debt and the positive outcome of the sale prompted them to support it.

Wenceslao said he supported the move because the City can save on interest since it can now afford to pay off the loan.

The amount the City has been paying for the loan could have been used to fund other programs and projects of the City, such as the rehabilitation of roads and extending financial assistance, he said in an interview over radio dyHP.

For his part, Cabarrubias said the City needs more funds that can cover the delivery of basic services.

“The City needs the money,” he said.

Terms

As stated in the resolution, only developers with a net worth of at least P25 billion as of 2012 may bid for the property.

The bidder must have constructed mixed-use projects consisting of 300,000 sq. m.—200,000 sq. m. of commercial roads and office space and 100,000 sq. m. for residential use -- within the last five years.

The bidder must have also engaged in real estate development industry for a minimum of five years from the submission of bid.

A downpayment of 50 percent shall be paid immediately upon the awarding of contract and the remaining balance shall be settled within a maximum term of three years, paid in equal annual installments with six percent interest per year.

All taxes and fees for the transfer of the title, except transfer tax, shall be paid by the bidder.

The proposed resolution also requires the bidder to present their conceptual design of the project during the bidding. The City will require that 65 percent of the total area should be a buildable zone and the remaining 35 percent should be open spaces.

The winning bidder for Lot No. 8 or the Calungsod template site is required to construct an arena with a minimum seating capacity of 16,000. It should start construction within six months from the date of the turnover of the property.

Loan payment

City Legal Officer Jerone Castillo said that the sale of SRP lots will help the City pay off the loan it took for the reclamation project.

The City has a balance of P3.2 billion out of the more than P5-billion loan it availed itself of from the Japan International Cooperation Agency (Jica) for the SRP.

The City has been paying some P500 million a year for the loan principal, interest and guarantee fee.

“Despite the earnest efforts to pay back the contracted loan, the City Government’s obligation remains outstanding at almost P3 billion,” the resolution said.

Castillo is optimistic the City will earn at least P12 billion from the lot sale.

“That’s a very conservative estimate,” he said.

Castillo and City Hall lawyer Mary Rose Salvatierra drafted the resolution after the executive department sought their help.

‘4 investors

Former city councilor Jose Daluz III, chairperson of the City’s committee on awards, earlier said four investors have expressed interest to buy the the 26-hectare property.

Daluz refused to name the investors but said they are “big players” in the country.

Mayor Rama also said earlier that SM Prime Holdings Inc. and Robinsons Land have expressed their intent to buy the property.

The City is also expecting to generate at least P2.5 billion in real property taxes if investors start putting up their structures at the SRP.

In 2012, the council passed an ordinance that seeks to protect the 300-hectare SRP and its stakeholders from “unlawful and unauthorized” transactions.

Councilor Wenceslao, who authored the measure, invoked Republic Act (RA) 3857 or the Revised Charter of the City, which provides that the power to authorize the sale or disposition of real property of City Hall lies solely with the council.

Under the ordinance, no one will be allowed to solicit bids for, or hold for public auction or bidding any properties at the SRP, as well as advertise or publish the sale, disposition, transfer or conveyance of the SRP lots without securing the council’s approval.

On September 19, 2013, the councilors allied with Rama proposed an ordinance that sought to repeal Ordinance 2332, but failed to get the council to approve it.

Team Rama allies in the council earlier said that Ordinance 2332 impedes the authority of the mayor “to openly entertain” prospective buyers of the 300-hectare property.

They also said that the City needs to sell parts of the SRP to properly manage its cash flow and maximize its delivery of basic services. (RVC)

Published in the Sun.Star Cebu newspaper on August 12, 2014.

Local news

DISCLAIMER: Sun.Star website welcomes friendly debate, but comments posted on this site do not necessary reflect the views of the Sun.Star management and its affiliates. Sun.Star reserves the right to delete, reproduce or modify comments posted here without notice. Posts that are inappropriate will automatically be deleted.

Forum rules: Do not use obscenity. Some words have been banned. Stick to the topic. Do not veer away from the discussion. Be coherent and respectful. Do not shout or use CAPITAL LETTERS!

Today's front page

Sun.Star Cebu front page for October 21, 2014

Other front pages

Sun.Star Jobs
  • Sunstar Multimedia
  • Filipino Abroad
  • Pacman blog
  • SunStar Celebrity
  • Sinulog
  • Habemus Papam
  • Sun.Star Zup!
  • Philippine Polls
  • Pnoy
  • ePaper
  • Calamity Report
  • Festivals
  • goodearth
  • tell it to sunstar
  • Obituary
  • Technology