FILINVEST Land Inc.’s (FLI) offer to develop a 50-hectare portion of the South Road Properties (SRP) hit a snag after Cebu City officials failed to publish on time the ordinance on the joint venture guidelines.
The Joint Venture Selection Committee (JV-SC) cannot formally discuss and evaluate FLI’s unsolicited proposal yet because the ordinance creating the body and prescribing the JV guidelines has not taken effect yet.
City Administrator Francisco Fernandez admitted they overlooked the effectivity clause of the ordinance, which will only take effect 10 days after it is published in a local daily.
“At this point, we can only discuss the proposal informally kay nakalimtan nato na ang balaod ni-require ug (because we forgot about the clause which required a) publication. So technically and legally, the JV-SC cannot function yet and the guidelines have not taken effect yet. But we intend to publish it on Sunday,” he told Sun.Star Cebu last Friday.
The ordinance “prescribing guidelines and procedures for entering into joint venture agreements with private entities” was approved by the City Council last Sept. 17.
“Admittedly, this has caused a delay in the review and approval by 10 days or even more but we will catch up,” said Fernandez, JV-SC chairman.
The JV-SC is composed of two former city administrators, City Hall lawyers, the city treasurer, and observers from the private sector and the Commission on Audit.
It is tasked to evaluate any proposal for a JV that may be submitted to the City, including offers to develop the SRP.
While the ordinance has not taken effect yet, Fernandez said all of its meetings and discussions on FLI’s offer will be informal.
FLI has submitted an unsolicited proposal to buy a 10-hectare portion of the SRP, and to develop another 40 hectares under a JV with the City.
In his news conference last Friday, Mayor Tomas Osmeña said the City will allow FLI to collect a minimal project development cost refund of around P5 million from the winning challenger of their bid, if FLI decides not to match the challenger’s offer.
He said, though, that a refund might not be necessary because FLI is bent on matching any higher offer by the challengers.
The decision, though, did not sit well to an ally of the opposition, who reminded the mayor of his objections to the project development cost refund in the proposed Carmen Bulk Water Supply Project.
By changing his stand on the collection of development cost refund in a competitive bidding, the mayor could turn off investors and businesses here, lawyer Aristotle Batuhan said.
“He is sending the wrong signal to investors that rules in the city can change every now and then, depending on the nature of the project and who you’re talking to. Why the sudden turnaround? Is the City so desperate to sell the SRP?” he told Sun.Star Cebu.
Batuhan said he is commenting on the issue as a resident of the City and not as one of the lawyers of Ayala Corp., a partner in the Carmen water project.
The Ayala consortium had wanted to supply water to the Metropolitan Cebu Water District (MCWD) through is Carmen Bulk Water Supply Project.
But it did not push through with the project because the mayor lobbied with National Government agencies and opposed the consortium’s demand for a refund of the expenses in developing the water source in Carmen town.
That time, Osmeña said no other supplier would be willing to participate in the bidding because they will have to pay Ayala some P150 million in development cost if the latter cannot match the winning bid.
“He’s now saying that a refund is acceptable, but it will not be necessary because Filinvest will match any offer. He’s missing the point. The point he made before in the water project is absolutely no development cost,” said Batuhan.
“But here he goes; he’s even speculating on the amount. In principle, he’s changing the rules of the ballgame,” the lawyer added. (LCR)
