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Friday, March 19, 2004
Housing developer still to get go-signal
A LOT has yet to be done before the joint venture agreement for the construction of the P100-million Paradise Housing Project in Barangay Looc, Mandaue City could be signed.
City Administrator Serafin Blanco admitted that although Willow Park Properties Inc. has been “pre-qualified” by the National Housing Authority (NHA), the bids and awards committee (BAC) still has to conduct its own evaluation of the contractor’s capacity and competence to undertake the project.
Until BAC issues a notice to award to Willow Park, the City Council cannot yet grant Mayor Thadeo Ouano the authority to sign a contract with the developer, said Blanco.
He also admitted that even the draft agreement, which the mayor submitted to the City Council, still has to be revised because a number of concerns have not yet been clarified.
As planned, three medium-rise buildings will be built to hold a total of 300 housing units, in Barangay Looc, Mandaue City. NHA will provide P100 million, taken from the 1998 Poverty Alleviation Fund, to finance the project.
Issue
Blanco said the issue concerning the developer’s share in the project’s profit still has to be discussed. He said the P100-million project cost should already include the developer’s mark-up profit so it is not anymore supposed to share in the project’s profit, which will be charged against unit’s amortization cost.
As for Mandaue City, Blanco said City Hall will also waive its profit share in the amortization so the housing project would really be affordable to the beneficiaries.
The amortization cost will be computed based solely on the amount that the City is required to pay to NHA.
Under Mandaue’s agreement with NHA, the City Government is required to pay NHA the P100-million principal obligation for a period of 20 years, at an annual interest rate of nine percent.
The City will be remitting P2.7 million, inclusive of the interest, to NHA quarterly. The City, in turn, will get the amount from the amortization that will be paid by the housing beneficiaries.
Blanco said the issue concerning the amount and kind of equity that must be put up by Willow Park still has to be threshed out, too.
Equity
He explained that there is a need for the equity because the developer will initially be using its own funds to construct the project. The developer will just submit a billing so NHA can release the payment.
NHA will initially release P30 million to finance the start of the project but the remaining P70 million will be released through progress billing.
Blanco said Willow Park’s design of the three medium-rise housing buildings has not yet been attached to the draft agreement. NHA has not yet sent its written certification that Willow Park has indeed passed its pre-qualification process. ROV
(March 19, 2004 issue)
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