Thursday, August 18, 2005
Cebu City loses P232 million in land swap
By Linette C. Ramos
CEBU CITY -- Even if the Cebu City Government stands to lose at least P232.2 million, the City Council favors the land swap deal with the Provincial Government as this will address poverty and urban poor housing problems in the city.
There are no legal impediments to the land swapping, the council said, "but there should be appropriate legislative intervention to put into agreement what the City and the Province have already agreed on in principle."
The City Government will be able to ensure that 2,815 urban poor families get to keep the Province-owned lots they have been occupying in the last 30 years, if the deal materializes.
Of the total 4,148 families, only 1,433 have paid in full for the Capitol lots.
In exchange for the Capitol's 504,055-square-meter property, the City is planning to give the Province a 33,737-square-meter prime lot at the North Reclamation Area, which is presently used as nursery and storage space for City Hall equipment.
While the current market value of the Province's property amounts to P3.15 billion, the deal is not favorable to the City in financial terms since it will be able to collect a maximum amount of only P183.1 million from the occupants.
The market value of the City's property is P415.3 million.
Some P116.18 million in amortization that the Province collected since 1993 will remain with Capitol. The City will only be collecting the outstanding balances of the occupants.
Some 1,500 families have already paid in full their obligations to the Provincial Government.
"It may do well to be aware that in terms of financial considerations, the City of Cebu is at the losing end. But a local government unit is created and run not as a business entity for profit and gain but to govern and serve its constituents," Councilor Edgardo Labella said.
"All other considerations, including the amount the City would lose, take a backseat to the primary responsibility of the government to provide important services such as housing," he said.
Labella, chairman of the ad hoc committee tasked to review the legality of the deal, presented their report to the council Wednesday, three days after Mayor Tomas Osmeña accused them of sitting on the proposal.
To make sure that the City will not suffer from further losses, the council wants the City Treasurer's Office and not the Division for the Welfare of the Urban Poor (DWUP) to handle the collection from the beneficiaries.
DWUP, the councilors said, already has its hands full monitoring and collecting the accounts of some 5,000 beneficiaries of other housing projects.
"Nonetheless, there is a need to beef up the loan collection capability of the City. Although DWUP's performance in loan documentation and monitoring has greatly improved, it still needs further improvement," the council said.
In the report, the ad hoc committee said there seems to be no legal impediment to the deal since it is a transaction between two local government units.
It also finds basis in the Urban Development Housing Act, which allows land swapping for the purpose of urban land reform and housing.
"The main plus factor of the transaction is that it will boost the capability of the City to address effectively the problems of the urban poor," the committee said.
The 2,815 families may face eviction if City Hall does not intervene since they failed to pay the Province the amortization of their lots.
In a resolution, the council asked the city administrator to present a concrete action plan on loan documentation and collection of amortization from individual occupants.
They also asked the DWUP to have an onsite development plan so that other urban poor families can benefit from the Province-owned lots in Barangays Apas, Luz, Busay, Mabolo, Lorega, Camputhaw, Lahug, Capitol Site and Kalunasan.
Under Provincial Ordinance 93-1, occupants of the Province-owned property were entitled to purchase their lots on installment basis from 1993 to 1998. This was later extended to May 2004.
The occupants asked for another extension but Gov. Gwendolyn Garcia vetoed the ordinance seeking to move the deadline for payments.
Only 1,433 of the 4,148 families have paid in full. The rest face forfeiture of the payments they have so far made and eviction from the property. (Sun.Star Cebu/Sunnex)
(August 18, 2005 issue)
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