BACOLOD City Mayor Evelio Leonardia signed the memorandum of agreement (MOA) with the Bacolod Real Estate Development Corp. (Bredco) for the operation and management of the city port for another 25 years after the expiration of the original 25-year contract in 2020.
Leonardia said Tuesday, February 20, that he signed the MOA on February 19 and it will be forwarded to the City Council for ratification.
The City Council earlier approved a committee report with recommendations that Bredco will pay not less than P6-million annual compensation to the City Government.
It also stipulated that Bacolod will get a one-time P8-million backward adjustment, and will also receive 25 percent upward adjustment every five years.
Bredco earlier offered a P3.8-million compensation, with an increase of around 350 percent, while the Technical Working Group made a proposal of P5.2 million based on the last 10 years income of Bredco.
The City Council pushed to make it P6 million, with an increase of almost 800 percent, at an average of at least P500,000 per month for five hectares. Or there will be at least P100,000 per hectare per month of compensation that the City will receive.
The exercise of the option to renew by Bredco is embodied in the March 16, 1995 Comprehensive Revised Reclamation Agreement (CRRA) between the City of Bacolod and Bredco. Bredco’s contract will expire in March 2020, and at present, it is paying P800,000 per year to the City Government.
The City Government owns the 50,000 square meters lot at Bredco port.
“If you will read the contract, it is practically a 50-year contract in so far as the port operation is concerned because it is so clearly stated there that the option belongs to Bredco, meaning that is legal and was agreed upon,” said Leonardia.
“What is just being considered there is the adjustment of the compensation, which was emphasized by the late former vice mayor Kenneth Barredo, the word “compensation” and not rental,” he added.
He said that as of the moment, the P6 million is good enough for the city.
Leonardia pointed out that they agreed with the P6 million because it is not about rental or direct financial transaction.
This has considered the basic principle that in the agreement between the City Government and Bredco, the city will not expend on this, and in exchange Bredco will also be given a leeway, he said.
“The City Government can demand even more than that and so on and so forth, but the bottom line is that it has to be an amount that both parties will agree on,” he said.
Abang Lingkod partylist Representative Stephen Paduano earlier said the “premature renewal” of the CRRA is a total sellout of the City of Bacolod.
He asked why the majority members of the City Council appeared to be in a hurry to grant Bredco such privilege when the CRRA contract will expire on 2020 yet.
Leonardia countered the claim, saying there is no such thing as a "premature renewal" because there is no renewal.
“How can there be a ‘premature renewal’ (when) we are not talking about a renewal here. That only shows how they understand the concept of the whole transaction,” he said.
The mayor received the letter from Bredco signifying its intention to exercise its option to extend its contract in October 2017.
Vice Mayor El Cid Familiaran and Councilors Caesar Distrito, Dindo Ramos, Em Ang, Cindy Rojas, Elmer Sy and Bartome Orola earlier issued a joint statement in response to Paduano’s claim.
They said the law provides that obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.
They added that the 1995 CRRA, the contract entered into by and between Bredco and the City, has already been found by the judicial courts to be binding and valid.
The takeover ordinance could no longer be used as a basis of the approval of the memorandum of agreement, considering the court has already declared it illegal, they further said.
Leonardia supported the statement of Familiaran and the councilors and he questioned the administration of former mayor Monico Puentevella for its failure to fight the takeover ordinance which includes the rate increase.
“If we will continue to fight over these, it would mean that in the meantime we will continue to get P800,000 compensation because its prevailing,” the mayor said.
He said the port is a component of the city’s tourism industry and he believes that tourism will become the biggest industry in the world.
“So we have to be ready for that. The port is a factor of it. We cannot deny that the Bredco project has changed the complexion of Bacolod,” the mayor added.