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Monday, January 16, 2006
City to press agency to pay convention center amortization
THE City Government of Baguio will pursue the Bases Conversion Development Authority (BCDA) to fulfill its part in the deal with the local government and the Government Service Insurance System (GSIS) for the purchase of the Baguio Convention Center (BCC).
Mayor Braulio Yaranon will send a team composed of Acting City Legal Officer Melchor Carlos Rabanes, City Administrator Peter Fianza and City Accountant Antonio Tabin to conduct an executive level dialogue with the BCDA to expedite the payment of amortization as stipulated in the memorandum of agreement (MOA) for the city's purchase of the convention facility.
As per the MOA dated Jan. 23, 2004, GSIS agreed to sell the convention center to the city for P250 million, the payment of which would be taken from the city' s 25 percent share from the lease of Camp John Hay (CJH) to be remitted by the BCDA.
Upon signing of the agreement, the BCDA paid the initial P50 million while the P200 million balance will be paid in yearly amortization of P35 million, which will also be remitted to GSIS by the BCDA.
However, the BCDA has not paid the first amortization, which has been due since Feb. 5, 2005.
GSIS housing and real property development group senior vice president Arnaldo Cuasay issued a demand letter to the BCDA last June where he reminded concerned parties on the terms of contract, which states that "in the event of the non-payment by the city of one annual amortization on its due date upon due notice, the agreement and all other agreements on the property between the City Government and GSIS shall be terminated."
The termination of the contract will mean that the city will have to return the convention facility to GSIS.
Rabanes said they hope to convince the BCDA to keep its end of the agreement and comply with its obligations to the city.
The city has been trying to collect its mounting share from the CJH lease from the BCDA to no avail.
The mayor said the arrears amounting to over P600 million based on his computation of the city's 25 percent share from the annual rental as follows: from 1997 to 2001, the annual rental is P425 million per year with interest at 12 percent and penalty charges of three percent on unpaid rental; rental fees from 2002 onwards is P150 million per annum with the same interest and penalty charges. (AR)
(January 16, 2006 issue)
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