Wednesday, September 29, 2021

Nalzaro: Councilor bares it all on Carbon plan


In my columns last week about the P5.5 billion redevelopment plan of Carbon Public Market, I presented all sides of the issue, from the administration to the opposition. The issues that cropped up before and after the Joint Venture Agreement (JVA) was signed by Mayor Edgardo Labella and the developer, Megawide Construction Corp., were all laid down and sufficiently answered by both parties. Vice Mayor Michael Rama, who showed some concerns on the redevelopment, was also given a chance to air his side by publishing his letter in this column last April 5.

The opposition belonging to the Bando Osmeña Pundok Kauswagan claimed that they and their panel of legal consultants were not given ample time to review the contract. The voting approving the JVA was railroaded by the administration allies. Although the opposition admitted that they have a common stand to oppose the multibillion-peso development because they don’t want to be dragged in legal suits in the future, claiming that the deal is “disadvantageous” to the City Government. They said the present income of Carbon market operations alone is much bigger than what is agreed in the JVA in which Megawide will give P50 million to the City Government every year for the first five years and a 10 percent increase every year until the expiration of the contract for 50 years. They also claimed that a public hearing was not conducted.

Administration ally City Councilor Raymond Alvin Garcia, majority floor leader, gave an overall view and chronicled what really happened when the JVA was discussed and approved in the council. In the spirit of fairness and fair play, here’s the full text of his letter:

“This has reference to your columns that SunStar Cebu published on March 28, 2021 (“Putting the Cart before the Horse”) and March 30, 2021 (“Opposition’s side on Carbon redevelopment”). Thank you for asking the right questions about the imminent modernization of Carbon. Allow me to set the record straight on the points raised by my fellow councilors.

“The Cebu City Council, including the minority bloc, had ample time and several opportunities to review the JVA between the City of Cebu and project proponent Megawide Corp.

“The Joint Venture Selection Committee (JVSC) of the City Government endorsed the JVA to the City Council on Dec. 11, 2020. The legislature approved the same document only by Jan. 6, 2021. All councilors had three weeks, some 26 days, to thoroughly scrutinize the provisions of the JVA.

“The city ordinance governing procedures for entering into joint venture agreements with private entities, City Ordinance 2154, does not require a public hearing, contrary to what some of my colleagues at the council asserted.

“Nonetheless, the project was presented and explained to the council at least three times prior to the approval of the JVA.

“The first presentation to the council was on Sept. 16, 2020. The JVSC then formally endorsed the JVA to the council with its recommendations in favor of an approval on Dec. 11, 2020. All the councilors were given copies of the draft JVA during this session, almost one month before the council authorized the mayor to sign and seal the contract.

“On Dec. 17, 2020, a City Council ad hoc committee tasked to look into the JVA conducted a public hearing. Invitations were sent to councilors along with the vendors and representatives of Megawide. Apart from majority councilors and the proponent’s representatives, only Councilor Nestor Archival of the opposition attended.

“Finally, the City Council tackled and subsequently approved the resolution authorizing the mayor to sign the JVA on Jan. 6, 2021. Vice Mayor Michael Rama approved the resolution as well on Jan. 11,


“On the matter of the LGU’s (local government unit’s) share in the project’s income, the City stands to benefit greatly from the annual guaranteed payments stipulated in the joint venture agreement.

“You will find in the City’s Audited Financial Statement for the period ending Dec. 31, 2019 that gross receipts from market operations for that year was P106 million. This, however, is the aggregated gross receipts across 10 public markets across Cebu City — five market units comprising Carbon’s operations (Units 1, 2, & 3, Freedom Park and Warwick Barracks) AND five other public markets within the

city’s jurisdiction including the Pasil Fish Depot, Taboan Market, Pardo Market, T. Padilla Market and Ramos Market. Net income from all these public markets, which has considered operating expenses, stood at only about P40 million to P50 million. Carbon represents only about 40 percent from this total.

“On the other hand, based on the JVA, the City stands to gain around P50 million in annual guaranteed payments for Carbon market ALONE. The City will continue to generate revenues from the other public markets on top of this annual P50 million AGP, which, in my point of view, is already very advantageous for the City.

“In addition, the Carbon public-private partnership will also generate other revenues for the City from tax sources including real property taxes, local business taxes and other fees, which is about an additional P20 million to P25 million. This is also on top of the economic benefits that the project will generate through its capital expenditures and annual operations expenditure such as local employment, local supply preference, tourism boost, farm-to-market efficiencies and the like.

“I do hope these facts sufficiently shed light on the issues. Again, thank you for bringing public attention to these matters.”


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