Seares: Cebu2World/Megawide already spent more than P500M and spending P1.2M a month, says ‘bleeding’ for Carbon project with zero cash flow may be ‘impossible to sustain.’ But collecting market fees can't be lawfully delegated by an LGU to C2W or other private entity.

CEBU. (From left) Lydwena Eco of Cebu2World and Councilors Mary Ann de los Santos and Joy Pesquera. (Cebu City Sanggunian Secretariat/SunStar File)
CEBU. (From left) Lydwena Eco of Cebu2World and Councilors Mary Ann de los Santos and Joy Pesquera. (Cebu City Sanggunian Secretariat/SunStar File)

FOR the first time, Cebu2World Development Inc., subsidiary of Megawide Construction Corp. -- Cebu City Government's partner in the Carbon modernization joint venture -- publicly talked about its woes, saying it had spent P500 million already and spends P1.2 million a month for the project but has yet to get cash in return.

In last Wednesday's public hearing on amendments to the city's Market Code, Lydwena Eco, deputy general manager of Cebu2World (C2W), told the City Council the collection of market fees is "critical" as it is "impossible" for them to spend for the development and the operating expenses "without a revenue stream."

Eco said that on top of the P500 million, as of that day (September 27, 2023), and the P50 million "annual guaranteed payment" to the City, they spend P1.2 million per month "for maintenance, housekeeping, security, pest control, facilities and utilities, for the upkeep of the market, modules 1, 2, and 3, the Bagsakan and Lavos areas."

To push her point, Eco, who has worked with C2W for the last three years, cited specifics: 35 security guards, 11 in housekeeping and eight in maintenance, 64 "decent toilets," 86 "fully operational" CCTV cameras, a public address equipment, shower rooms and sleeping quarters for vendors. And Carbon Market has "100% power backup from a 750-KVA genset." "Walay brownout sa Carbon," Eco said.

DEFEND, ATTACK. In the same forum, Eco took other defense and attack moves:

[1] She disputed that it's privatization if C2W collects fees. No, she said. They're not like a private mall like Ayala, which picks the lessees or renters, sets the amount of rental and evict lessees. It's the Market Authority, she said, that has the said powers at Carbon.

[2] Megawide and C2W have a commitment, made to the late mayor Edgardo Labella and then Mayor Mike Rama, not to displace any vendor. And that pledge stands, Eco said. There are vacant stalls because these are "buffers" or excess space on top of the listed number of vendors. For anyone shut out, just let our offices know, she said.

[3] Compared with rates of other markets in Cebu's tri-cities, the entrance and rental rates in Carbon are "cheaper," she said.

[4] She debunked the story of the "big bad corporation abusing the poor vendors," saying she "can face my God when the time comes" that she, her 28-member team, "have not allowed ourselves to work for a company that abuses 8,000 vendors, caromateros, kargadores for profit." No councilor told her that face-to-face with divinity could take some time yet while the issue before the Sanggunian and the court of public opinion has long been unresolved.

[5] She implied that others must be "taking advantage of the chaos." For so long nothing has about Carbon, she said, "do we really want Carbon in status quo?"

Minority Floor Leader Nestor Archival Sr. though chided Eco that if she had C2W presented the plan and talked with the vendors, the confusion and "misunderstanding" could've been avoided. Eco said they met with the vendors but only after the "detailed floor plan," which followed the "conceptual development plan," was completed. As an engineer, Archival knew that, Eco said.

ON RIGHT TO COLLECT CASH. On Councilor Mary Ann de los Santos's questioning, Eco said they are not yet collecting the fees since it's not yet provided for in the Market Code, which is among the amendments sponsored by Councilor Renato Osmena Jr., chairman of the committee on markets.

De los Santos said the function to collect fees is reserved to the local government under Section 130 (c) of the Local Government Code (of 1991, Republic Act #7160). She said the City was previously reprimanded in a "similarly situated" case, in which COA ruled that only the LGU can collect "all these fees." Councilor Rey Gealon, committee on laws chairman, confirmed thus: "It's indicated in the committee report."

CHECKS-AND-BALANCES. Councilor de los Santos objected to the amendment (under 11.3) providing that "all fees collected from Cebu Carbon Market shall be collected by C2W." And this (under 11.13): "Any changes of the rates prescribed... shall be upon the recommendation of the Market Authority and upon the approval of the city mayor."

The Market Authority, de los Santos said, as a special body, has majority of its members appointed by mayor, which "negates the principle of checks-and-balances." It would also produce "the effect of perpetual amendment of an ordinance by the executive," a function that rests solely with the City Council, the councilor said.

Majority Floor Leader Jocelyn Pesquera told the councilors that at the meeting of the committee on laws and committee on markets, concern was raised about the power delegated to the Market Authority and the mayor to change the fees. It's "detrimental and undue delegation of power," she said, as the City Council's authority is only delegated power. They proposed at the committee hearing, Pesquera said, that market fees shall not be increased unless otherwise provided in an amendatory ordinance or in a private partnership agreement entered into by the City Government under RA 7718.


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