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Friday, October 03, 2008
Robinsons pays P463 million for land
CEBU CITY -- More than two years after Cebu City Hall sold the property, Mayor Tomas Osmeña finally received from Robinsons Land Corp. the P463.5-million final payment for a north reclamation area (NRA) lot.
Osmeña lambasted the Commission on Audit (COA) for the delay, and expressed fears that the agency might do the same to the proposal of Filinvest Land Inc. (FLI) to develop a 50-hectare portion of the South Road Properties (SRP).
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The mayor warned that any delay by COA will cost the people of Cebu City a lot.
The P463.5 million has already been budgeted for this year, but City Administrator Francisco Fernan-dez said they have some amounts left for certain priority projects.
Because the COA sat on the contract for the NRA lot and caused delays in the payment for two years, the City lost some P50 million, which it could have earned in interest if the amount had been deposited in the bank, the mayor said.
At City Hall on Thursday, Robinsons Land president and chief operating officer Frederick Go turned over the P463,450,000 manager's check to Osmeña as final payment for the 46,345-square-meter lot at the NRA.
A down payment of P115,862,500 was paid in April 2006.
"This deal was consummated on June 14, 2006 yet. It's now October 2008, so the City was deprived of money because COA sat on it for the reason that they think the mayor made money out of it. The City lost about P50 million, at the bank interest rate of five percent a year," Osmeña said during the turnover ceremony Thursday.
The signing of the deed of absolute sale and the turnover of the check was witnessed by the City Council and department heads of the City Government.
Osmeña is optimistic about Robinsons' proposed mixed-use development project on the property, saying the real estate giant will convert the land into a taxable property and provide more business and job opportunities for Cebuanos.
COA did not immediately approve the sale of the lot worth P579.3 million because they did not find the City's selling price of P12,500 per square meter to be enough.
Citing the figures of the appraisal teams of some banks, the lot known as the City Hall Block could be sold for P15,000 per square meter, COA reportedly said.
"My greatest fear is that it's going to happen again with the Filinvest proposal. I tell you, the biggest problem of government is the government itself. So I hope they will not sit on the proposal of Filinvest. And I suspect they will sit on it, and it's going to cost us a lot," Osmeña warned.
The delay caused by COA in the NRA lot sale is the reason the City sought COA's prior approval of the SRP lot's selling price, said City Administrator Francisco Fernandez.
Under the government's procurement laws, any disposal of property by a government entity should be subject to approval by the COA.
In the event of any delay in the approval of FLI's proposal, Fernandez said they can use part of Robinsons Land's payment to pay for the SRP loan payment for February next year.
"But we have already asked COA to appraise the value of the SRP lots, and it's already acceptable to them, that's why they can't question that anymore. We don't expect any delay where lot prices are concerned. The question there would be if COA will consider the contract valid," he told reporters.
When the FLI's unsolicited proposal is put up for competitive bidding, among the main points that will be considered is whether or not the City's 10-percent share in the firm's gross sales is sufficient, and how much the competitor is willing to invest.
FLI wants to buy a 10-hectare lot at the SRP and develop 40 hectares under a joint venture agreement with the City, where the latter will get a 10 percent share of the annual gross sales. (LCR/Sun.Star Cebu)
For more Philippine news, visit Sun.Star Davao. (October 3, 2008 issue)
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