Tuesday, December 18, 2007 Opposition questions loan measure By Lizanilla J. Amarga
THE City Council approved Monday an ordinance authorizing Mayor Constantino Jaraula to loan P500 million to buy back the Cogon and Carmen public markets.
With the money, they also plan to construct the legislative-executive building and purchase heavy equipment.
But opposition councilors Teodulfo Lao and Zaldy Ocon likened the move of buying back Cogon and Carmen public markets as administration party PaDayon Pilipino's "attempt to correct a mistake by creating a major mistake."
Lao is even calling for a review of the two Build-Operate-Transfer (BOT) contracts the city government signed with UKC Builders, Inc. during the administration of former mayor Vicente Emano, the titular head of PaDayon Pilipino.
The P500 million loan is seen by the opposition as compounding the already P3 billion in liabilities and equity of the City Government as reflected in the Commission on Audit (COA) Annual Audit Report 2006.
Budget and Finance committee head City Councilor Simeon Licayan pushed an ordinance to authorize Jaraula to negotiate for a loan of P500 million.
The amount is reportedly intended for the construction a legislative-executive building adjoining the current City Hall area along the riverbank and for the purchase of heavy equipment.
When the amount of the loan drew flak, the legislative measure was returned by Jaraula to now read as an authority to negotiate for a loan of P300 million for the construction of the legislative-executive building and for the purchase of P90 million worth of heavy equipment.
Amendments
Later, it evolved into an ordinance that now stipulated the name of the banks from whom Jaraula is authorized to negotiate with.
Licayan said the legislative measure should amend all the previous ones but this time it would not be P300 million but raised to P500 million to now include the purchase prices of the BOT contracts for Carmen and Cogon.
The move was opposed by Lao and Ocon. They were however outnumbered by the PaDayon Pilipino city councilors.
Majority of these PaDayon Pilipino city councilors are the very same officials who earlier approved the BOT contracts for Carmen and Cogon.
Lao objected to the proposed ordinance saying that the P500 million to-be authorized for loaning out is an amount that has no basis.
He said the BOT contracts need review considering that the projects were undertaken without feasibility study and that to buy them back may further compound City Hall's liabilities.
"I stand by my objection to it," he said.
Ocon echoed Lao's objection and added that he would want to know how much of the P500 million would go to the pockets of UKC Builders, Inc.
This considering that the Redevelopment of Cogon Public Market costs P252 million and the Carmen around P118 million and that the City Government has already subsidized the operations of the two markets by P39 million.
Buyout
Licayan said the ordinance is only for Jaraula to study and negotiate for the P500 million loan.
Majority Floor Leader City Councilor Ramon Tabor said the "detailed computation" as to how much would be paid to UKC Builders, Inc. will still be subject for the approval of the City Council.
"Because I myself would want to know how much is our standing balance and how much will we pay for the two markets," he said.
The BOT contracts for both markets contain the conditions that would lead to a "buyout" include "changes in circumstances."
It states that when there is a law or regulation or as a result thereof, even including an interpretation of the same which became the basis of City Hall's entering into agreement, it produced a condition whereby either the UKC or City Hall's economic return on its investments is "materially reduced, prejudiced or otherwise adversely affected" a buyout is allowed.
It mandates the City Government to give UKC not less than 90 days notice that it wishes to close the BOT deal.
It further reads, "The City Government shall purchase all the project proponent-operator's (UKC) right, title and interest in and to the facility, and thereupon all the project proponent's obligations under the Agreement shall cease."
