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Thursday, January 13, 2005
Stop Matimco deal: CH told
By Aledel Gonzalesz-Cuizon
Sun.Star Staff Reporter
THE Legal and Adjudication Office of the Commission on Audit (COA) 7 finds the compromise agreement between the Mandaue City Government and a private firm “grossly disadvantageous to the City.”
Regional Legal and Adjudication Director Roy Ursal recommended that the deal should not be “allowed to complete its course” because it is “too one-sided in favor of Matimco.”
The compromise agreement was signed by Mayor Thadeo Ouano and Matimco Inc. vice president Alfred Go as a sort of settlement to end the private firm’s litigation case.
Suit
The firm sued the City in February 2004 and sought compensation for the expenses it incurred in developing a Subangdaku foreshore land, which it has been renting since 1988.
To settle the case, Ouano and Go signed a compromise deal last May 4 and agreed to transfer 21,362 square meters of the leased property to the private firm.
Unreasonable
“It is quite unreasonable and ironic for the City to enter into such compromise agreement and yield ownership over the lot involved when prior to this, it tried to sell this lot to Matimco at a consideration found by COA to be unfavorable and insufficient,” Ursal said.
Ursal wrote to Mandaue City audit team leader Carolina Mendez in response to a request for review and evaluation of the compromise agreement.
Ursal found the deal “unnecessary” and “contradictory” to its purpose.
“For sure, the objective of selling the property even at a low price to Matimco, that is the settlement of Mandaue City’s financial obligations, cannot be gained from entering into such agreement. Contrarily, it stands to lose not only the yearly lease rental from Matimco, but the whole compromised lot as well,” Ursal further stated.
No obligation
He added the City does not have to enter into a compromise agreement with Matimco because the City is not “indebted” to it.
“The City is not obliged to pay Matimco the cost of developing the land because as per agreement entered by the parties in the lease contract, these improvements will revert to the City of Mandaue at no cost after expiration of the lease contract,“ Ursal stated.
Same position
Citing the same point, Mendez also finds the terms of the compromise agreement unfavorable.
In a separate document, Mendez noted that Matimco already agreed in the first contract of sale to pay the City over P100 million for a portion of the developed area.
Ursal’s comments also coincided with that of former city attorney Malcolm Seno, who had said in a legal opinion last year that the compromise agreement is “highly grossly, grossly and grossly disadvantageous to the City to the nth degree.”
A month after issuing the legal opinion, Seno lost his seat as no appointment was issued to him for the city attorney’s post.
Even if it adopted Seno’s legal opinion, the City Council gave a provisional approval to the compromise agreement last December.
The provisional approval was granted subject to the opinion or approval of COA on the propriety of the compromise agreement. (AAG)
(January 13, 2005 issue)
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