Friday, July 04, 2008 COA tells Toledo to sue firm for P5.5M rent
GOVERNMENT auditors have asked the Toledo City Government to file appropriate complaints against a private builder for its failure to pay P6.5 million in monthly rent.
The Commission on Audit (COA), in its 2007 annual audit report, noted that the Ayesel Construction and Development Corp., which operated and managed the Toledo City Commercial Village, failed to settle its fixed monthly rental for two months merely after a year of its operation.
“It is recommended that legal action initiated by the City Government of Toledo be filed against Ayesel Construction (and Development Corp.)…so that the one year accrued rental, excluding other charges could be collected,” read the COA report.
Mayor Arlene Zambo said she ordered that the contract of lease to operate with Ayesel Construction be terminated for gross violation of the contract.
Zambo said they already filed a criminal complaint against Ayesel Construction president Antonio Licuanan last Jan. 3 for nonpayment of rental.
The City Government constructed the Toledo City Commercial Village on a one-hectare lot in Barangay Poblacion supposedly to maximize the City’s real property taxes for the City’s “growth and progress.”
Management
The contract was good for 10 years and renewable for another 10 years pending approval by the City Government.
The City entered into a contract of lease with Ayesel Construction for the management and operations of the commercial village.
But state auditors found that there was no document to prove whether the operation and management of the commercial village was offered to other private persons or entity, as agreed in the contract.
“The process of the public bidding was not observed…Lessee is questionable,” the COA said.
“Despite the various demand letters sent to the lessee for the settlement of its account the latter (Ayesel Construction) failed to settle its liabilities.
As a result, the City Government has been deprived of the whole year rental income of P5.5 million, state auditors said.(GMD)
