Don’t repeal SRP law, Tomas warns council

Former Cebu city mayor Tomas Osmeña yesterday warned the City Council against any “unauthorized” selling of the 300-hectare South Road Properties (SRP) while his former city administrator said not heeding this would “antagonize” Japanese loan funders.

For the first time since he lost the May election, Osmeña showed up in City Hall for a public hearing to oppose a plan by allies of Mayor Michael Rama to repeal a city ordinance that restricts the mayor’s ability to sell SRP lots by requiring council approval.

“The council is the last bastion of protecting the wealth of the City of Cebu,” he said.

He said it was a misconception that City Ordinance O2332 prohibits the mayor from making any new sale.

“The ordinance has not amended the mayor’s freedom of speech. He is free to entertain any SRP buyers. He can even sing and dance to them. The ordinance simply states that he cannot engage in any formal transactions without council approval,” said the former mayor and congressman.

Other speakers were former city administrator Nigel Paul Villarete, Joel Marie Yu of the Cebu Investment Promotions Center (CIPC), and Eduardo Ong Vaño of the Cebu Real Estate Brokers Association,

Yu said the ordinance should only be refined, not scrapped.

Only Ong expressed support for a repeal.

“We believe that it’s time that the mayor should be allowed to sell, enter into a joint venture or lease so future generations can enjoy the income from the property,” said the real estate broker.

Villarete, who was privy to loan negotiations with the Japanese government in the 1990s for the loan to develop the reclamation project, said it would be contrary to the SRP loan agreement if Cebu City sells the reclaimed lots and uses its proceeds to fund City Hall operations.

The project was aimed to create more space for manufacturing companies to spur economic growth, said Villarete, the current general manager of the Mactan Cebu International Airport Authority.

“If we deviate from the ODA (official development assistance) concept and try to sell and sell and sell to finance the release of allowances, Christmas parties, we will have an issue at hand. I’m sure that the people of Japan will not agree,” Villarete told the council.

Villarete was head of the infrastructure division of the National Economic Development Authority (Neda) when the SRP was being planned.

He said the reputation of the Philippine government was at stake for any violation of loan terms.

“We have to be cautious because the Japanese government has been very generous especially to Cebuanos and we do not want to antagonize the Japanese government,” said Villarete.

He said Neda and the Japanese government only authorized the city under the Osmeña administration then to sell about 80 hectares of the property take of loan amortization payments.

“The SRP is now a real estate project. It is a development project funded by ODA (official development assistance),” he said.

Osmeña’s allies said the Ordinance 2332 passed last year is aimed to “protect the SRP from unauthorized transactions.”

The former congressman who considers the SRP his centerpiece project as mayor said, the city “will not have an opportunity like this again” if the 300-hectare reclamation site is not properly managed.

A position paper by Mayor Rama’s executive assistant Jose Daluz III and city legal officer Jerone Castillo to the council also oppose a repeal. They said seeking a repeal would only recognize the legality of the ordinance.

The loan for the SRP, formerly known as the South Reclamation Project (SRP) was approved by Japan in 1996 based on a design like the Mactan Export Processing Zone (MEPZ), which currently employs workers with a payroll of P1.3 billion a month or a total of P15 billion a year.

Yu, meanwhile, said Japan signed the loan on March 1996 “because the Japanese government knows that the Japanese will directly benefit (from it) and they knew Cebu was running out of land” for manufacturing firms as MEPZ is at full capacity.

The Osmeña administration, Villarete said, convinced Neda and Japan to authorize the disposal of some parcels of land to address a “shortfall” which resulted from loan payments.

Villarete said the city had a shortfall of P225 million to P500 million in its loan payments from 2005 to 2010 because of minimal earnings from the SRP.

SRP lot sales were already made to Filinvest Land Inc. and SM Prime Holdings Inc. Villarete said payment for both sales was spread over six years to make sure the city government could meet its loan amortization during the period.

“It’s fortunate that this administration is not hemorrhaging to pay its amortization because we made sure that there is enough money until (the lapse of the SRP loan in) 2030,” said Yu of CIPC.

Yu asked city officials to “respect” the SRP loan agreement with Japan.

“Read the loan agreement and have some respect for it,” he told the council.

Towards the end, Yu urged the city to consider the need for a “meeting of minds” with mayor Rama. He also said the SRP also needs a highly-qualified manager. “We cannot just have ordinary people manage the SRP. It’s too valuable a property,” he added.