Supplemental budget eyed for SRP loan

A 2008 aerial view of Cebu’s South Road Properties. (CDN PHOTO/ JUNJIE MENDOZA)

Cebu City Mayor Michael Rama said he will request the city council to pass a supplemental budget this year for the full payment of the P3-billion South Road Properties (SRP) loan.

Rama said the additional budget will be presented to the council once the city receives the balance of the 50-percent downpayment for two lots in the SRP, equivalent to over P6 billion.

“This year, Cebu City will no longer be debt-ridden and we’ll wipe out the P3 billion principal loan. The billions (of pesos) we’ve been paying have deprived our constituency of basic services since this has gone to debt servicing,” Rama said during the 888 News Forum yesterday.

He first made the promise to make City Hall debt-free during his State of the City Address (SOCA) last July 4.

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The Cebu City government has already received checks amounting to P1.7 billion from SM-Ayala consortium and Filinvest Land, the highest bidders of the two SRP lots.

The amount, equivalent to 10 percent of their combined bid offers, served as bid security bond and will also form part of the downpayment. SM-Ayala consortium gave the lone bid of P10 billion for the 26-hectare Calungsod templete lot while Filinvest gave the highest bid of P6.7 billion for the 19-hectare lot located between its property and SM Seaside Complex.

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The Committee on Awards is reviewing the bid documents submitted by the two bidders. It is expected to award the sale of the two lots by the end of the month.

Under the terms of reference for the sale, the 50-percent downpayment should be paid by the winning bidders after they are awarded the titles to the properties. The balance will be settled equally in the next three years at an annual interest rate of six percent.

With a total bid price of P16.7 billion for the two lots, the city government expects to receive P8.35 billion as downpayment after the awarding of the contracts. Less the bid security bond of P1.7 billion, the city government still stands to get P6.65 billion.

City Treasurer Diwa Cuevas said, however, it’s not certain yet that the SRP loan will be included in the first supplemental budget (SB1) this year.

She said the Local Finance Committee is still working on SB1, which will fund the one-month salary bonus of each City Hall employee as well as other obligations and payables.

The SRP loan payment can still be covered by another supplemental budget, though, she added.

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