COUNCILOR Mylen Yaranon continues to question the privatization of the public market and is poised to raise issues in the upcoming meeting with the People Selection Committee (P4-SC).
Yaranon said economic gain for local entrepreneur will be in peril if the mall giant gets hold of the public market.
"Have we not learned from our lessons in the past? The presence of SM at the top of Session Road was very detrimental to the economy of the central business district. The only economy that survived then were the vendors at the Baguio Public Market, because they provided to the consumers a more affordable and fresher produce from the local suppliers. So please, enough of entertaining these giant mall chains in even developing our public market," Yaranon said.
Last week, Baguio City Mayor Benjamin Magalong signed Memorandum 433 series of 2020, awarding the original proponent status (OPS) to SM Prime Holdings Incorporated (SMPHI), disapproving the previous awarding to Robinsons Land Corporation (RLP).
The legislator said both proposals of RLC and SMPHI should be rejected.
"We should move on in formulating the project process by defining the mode of implementation, sources of finance and actions needed. Once we have set our financial goals and limitations, then we can proceed with finalizing the design process. Let us adjust the master plan to conform to formulation results and available finance. Then we prepare the bill of quantities and other tender documents," Yaranon added.
Yaranon said during the meeting next week, matters to be raised will include the completeness of an unsolicited proposal as to its documentary requirements and completeness as to substance does not ascertain that the unsolicited proposal provides the greater advantage and benefit to the community and revenues to the city.
"Let us study the SM Project Proposal and gather the comments from the reports of our evaluations and the PPP Center. I agree with the Socio-Economic Analysis that while the Unsolicited Proposal of SMPH provided a Project Economic Viability Assessment as indicated in page 8 of their resubmitted FS, there is no detailed economic impact analysis and said assessment presented lacks the details to establish the economic viability of the project," Yaranon added.
Yaranon said the estimation of the Economic Internal Rate of Return should be traceable, taking into consideration all economic costs and benefits of the project and in order for the committee to estimate the Economic Internal Rate of Return (EIRR), it has to assume/project the economic activity associated with the commercial tenants.
This will be difficult, Yaranon added, since various types of retail outlets can generate vastly different total sales even with a same-sized space. The committee would also have to assume income generated from SM leasing out their commercial spaces.
"The financial viability for the city is not beneficial to the city. The lease term is 50 years, and yet we only receive a land lease payment of 2.325 Billion for the entire term of the agreement, which shall be used to construct the two-story new public market and the temporary transfer area. When in fact, the ROI is 5.45 percent for a payback period of 18.34 years. We may be better off availing of a loan instead. Is this the price we have to pay for at no cost to the government," she said.
Yaranon said the technical design of SMPH may be complete, but is very deficient.
"The market stalls are overcrowded with very narrow pathways, insufficient fire exits, insufficient toilet facilities, no central wayfinding, no area for bagsakan, wet section at the basement with no light and ventilation, in other words, the public market is not prioritized," Yaranon said.
Yaranon added that another issue to consider is that a project for a new or upgraded market will not interest market users unless they have participated in the design of the project and clearly perceive that the development will bring advantages.
"Participation should occur at two levels: at the general planning stage the planning authority should ensure that residents' (consumers) needs are addressed; and at the level of the market the full participation of the traders should be sought. Even with such a dialogue, conflict may still occur and the fact that the new facilities are clearly an improvement may not be sufficient inducement. Retailers may refuse, for example, to transfer their activities to a new market if their new stalls are smaller than in the old market," the lawmaker added.