Sunday, July 01, 2007 Returns to date: P25M By Linette C.Ramos Sun.Star Staff Reporter
ELECTION season or not, the South Road Properties (SRP) and its potential to generate revenues has been a topic for debate, and Cebu City Mayor Tomas Osmeña has always been its number one defender.
The 295-hectare property’s ballooning debt, its ownership and other legal questions were some of the issues raised in the last two elections.
But for the mayor, the SRP is “the future of Cebu City.”
Ten years after the 12.292-billion yen loan (P5.958 billion as of August 2006) was made to fund the project, however, the City Government has so far earned only P25 million from the facility.
The amount is Bigfoot Global Solutions’ 25-year lease payment on two hectares of the SRP.
“We made P25 million from a lease agreement with Bigfoot and they wants to buy other properties there (at the SRP). It may not be much but we are working to sell some lots,” City Administrator Francisco Fernandez told Sun.Star Cebu.
“We have also made improvements that increased tax collection and we were able to fund projects despite the loan payments we had to make,” he added.
With some P1 million a day as interest alone, City Hall shells out some P500 million a year for the SRP’s amortization.
Fernandez said they hope to sell 30 hectares this year and are finalizing the bidding requirements.
He said that despite the SRP’s minimal income and the loan payments the City made in the past years, basic services and other projects were not sacrificed.
The City built at least 38 school buildings with 438 classrooms, distributed some 18,000 health insurance cards to urban poor constituents, paved roads, and constructed drainage systems.
Fernandez said these are just some of the accomplishments of the executive department in the last three years.
He also reported a 25 percent increase in tax collection in 2006 alone.
Without raising tax rates last year, revenues increased when the City intensified tax collection and got more careful in approving purchase requests, resulting in a P300-million surplus.
As the mayor began his third and final term yesterday, Fernandez is optimistic that the City can better cope with its financial obligations and provide basic services to constituents.
A real estate tax rate increase and proceeds from the sale of the City-owned lot at the North Reclamation Area amounting to P173 million will help realize the mayor’s projects, he added.
“Despite the fact that we paid P250 million for this year’s first payment for the SRP loan, we continue to increase our revenues. We increased our collection and limited our expenses, we were more prudent in our spending. Our financial situation will even improve because of the re-appraised real estate taxes,” Fernandez said.
Other endeavors of the executive department in the past years include the deworming project, improvements in the Cebu City Medical Center, purchases of additional equipment and garbage trucks and urban poor housing.
Fernandez likewise said that City Hall has “zero backlog” after fully computerizing its accounting system and devolving barangay funds accounting to the respective barangays. (LCR)
