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Saturday, September 27, 2008
Filinvest's bid on SRP 'very attractive'
CEBU CITY -- Officials of this city find "very attractive" Filinvest Land Inc.'s (FLI) unsolicited proposal to develop the South Road Properties (SRP) and expect to get two other offers from major developers in a month's time.
Mayor Tomas Osmeña will convene anytime the Joint Venture (JV) Selection Committee, which will evaluate the contractual arrangement for the JV proposal that FLI submitted last Thursday night.
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Although they have yet to read the details of FLI's offer, Vice Mayor Michael Rama and some city councilors said the package is attractive and could be advantageous to the City.
The outright 10-hectare purchase amounting to some P2 billion will relieve the City of the loan payment burdens for the next three to four years.
The City pays P300-P400 million every February and August for the principal amount of the loan, interest and other fees.
"Right now, from what I've seen, it's very attractive but we have to get hold of the copy of the proposal, check every detail before we can say it's acceptable or not," Rama said.
Councilor Hilario Davide III, co-author of the "Ordinance prescribing guidelines and procedures for entering into JV agreements with private entities," said that as long as the contract conforms with every provision of the ordinance, the council will approve it.
"We have not read the proposal yet but with an outright purchase of 10 hectares and a joint venture for 40 hectares, I think it's a pretty good proposal... The important thing is that it will have to be consistent with the guidelines," Davide told Sun.Star Cebu.
Last Thursday night, Cebuano-owned FLI presented their formal offer to City officials to buy 10 hectares of land and develop 40 hectares under a JV agreement.
The joint venture will include a cluster of high-rise buildings on the seafront, medical and retirement facilities, commercial and residential buildings and office spaces.
The City stands to gain at least 10 percent of the firm's annual gross sales under the JV.
For Councilor Sylvan Jakosalem, FLI's proposal will be hard to beat or match by other developers, considering that it took four years to prepare. "As explained during the presentation, it sounds very attractive and advantageous for the city," he said.
According to the records of the City Treasurer's Office, the City has so far paid P2.5 billion for the loan principal, interest and guarantee fees for the SRP.
It still has a balance of some P5.15 billion, payable up to 2025.
Osmeña said Friday that other members of the JV Selection Committee will be picked next week and will be convened anytime.
From the mayor, the proposal will go to the selection committee, which will evaluate and review the contractual arrangement before it is returned to the mayor.
The committee will be chaired by City Administrator Francisco Fernandez, and will include as voting members the city attorney and three officers knowledgeable in finance, in joint ventures and the technical aspects of the project.
Non-voting members include an officer from a regulatory body, an observer from the Commission on Audit (COA) and two observers from the private sector.
Joel Mari Yu, the managing director of the Cebu Investments Promotion Center (CIPC), the marketing arm of the SRP, said they expect to get another proposal in a month's time.
Yu said it's unlikely that the two developers would just challenge FLI's unsolicited proposal because they are interested in other areas of the 290-hectare SRP.
"They are submitting proposals for different areas, so they will not be competing against each other. We are expecting another proposal maybe within a month," he told Sun.Star Cebu.
Yu said that while other developers were asked to refine their proposals, FLI's was accepted because it fits the kind of integrated development the City wants for the SRP, and the firm was "the fastest to come up with a palatable proposal."
In a phone interview last night, he also advised Tinago Barangay Councilor to start packing up because he might just have to resign, as he himself promised if the City doesn't make a sale this year.
"Ipaputos na nya iyang mga butang. He has been making irresponsible statements about the SRP that he does not understand. It's time for him to eat his words because they were said not out of knowledge or facts, but because of politics. There should be some comeuppance here because no one can say irresponsible things and be able to get away with it," Yu told Sun.Star Cebu. (LCR/Sun.Star Cebu)
For more Philippine news, visit Sun.Star Cagayan de Oro. (September 27, 2008 issue)
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