Mayor Rama collects P6.7-B downpayment for SRP lots
A tired-looking Mayor Michael Rama says the checks for P6.7 billion will be deposited in Cebu City’s bank account today. (CDN PHOTO/ SANTINO BUNACHITA)
Cebu City Hall is now P6.7 billion richer, thanks to the downpayment made for two lots in the South Road Properties (SRP), said Cebu City Mayor Michael Rama.
Where are the checks?
The mayor, who just returned from Manila where he followed up payment with the developers, said they would be deposited in the bank later today.
He jokingly told reporters at a 4 p.m. press conference at a hotel near the Mactan airport that the checks may get lost if he showed them.
“What’s important now,” said Rama, who was in Manila with several City Hall officials, “is that the money is now with us.”
City Treasurer Diwa Cuevas, who accompanied the mayor, said there were seven checks from the winning bidders.
The turnover of the 50-percent down payment was made on Wednesday, Aug. 12, said the mayor.
READ: Mayor ‘threatened to cancel’ contract to get developers to pay city
It totalled P6.7 billion from the consortium of SM Prime Holdings Inc. and Ayala Land Inc., which was the lone bidder for the 26-hectare Calungsod templete lot, and Filinvest Land Inc., which gave the highest bid for a 19-hectare lot in SRP.
READ: SM-AYALA wins bid: P10 billion | Rama pulls surprise; serves SRP lot awards in Manila
The payment was proof that the developers still have confidence in his administration, said the mayor.
Rama gave a press conference in Manila about the developments before flying back to Cebu yesterday afternoon.
But the private developers didn’t attend the morning forum.
“It’s too much to be bringing and dragging (them). They had their share too,” Rama said when asked why SM, Ayala and Filinvest weren’t present when he made the announcement.
Rama admitted that the developers had apprehensions about their investment because of the Cebu City Council’s critical view of the public auction. .
Bury the pain
“It’s really not something I wish to talk about… We would like to look beyond. Let’s bury the pain. Let’s bury what we call the weight,” Rama said.
With the money in hand, the mayor said he would focus on submitting City Hall’s first supplemental budget (SB1) this year.
This will cover the P78-million Performance Enhancement Incentive (PEI) worth a month’s salary for all City Hall employees and pre-payment for the city’s outstanding SRP loan which is P2.9 billion.
Approving authority
The next step, said Rama, is for the executive department to continue documentation for the sale.
A Deed of Sale on Installment has to be issued after the down payment is made within 15 days from the issuance of the Notice of Award under the bidding guidelines.
The mayor’s critics in the legislature said the City Council is the “final approving authority” of the transaction.
Mayor Rama said he will have this matter reviewed by City Attorney Jerone Castillo.
CHALLENGE
Councilor Margot Osmeña the other day challenged the mayor to show the money after Rama announced on Monday that he had already issued and served a Notice of Award to the developers days earlier on Aug. 5.
The P6.7 billion represents half of SM-Ayala’s P10-billion bid and Filinvest’s P6.7-billion bid for the SRP lots made in a June 30 public bidding.
During the auction, a check for P1.6 billion was already turned over by the winning bidders as a 10-percent security bond which formed part of their downpayment.
The other half is to be paid over the next three years in equal installments at an annual interest rate of six percent based on diminishing balance.
With the 50 percent downpayment collected, Mayor Rama said his administration can prepare the city’s annual budget for 2016.
He said councilors can “submit their priorities.”
“I officially would like to bring to their attention that as we are pursuing bottoms-up, barangay-based budgeting, we are also bringing to the City Council, especially those who have been asking where’s the money, that they would be made to submit their priorities,” he said.
Aside from the vice mayor, other city officials who went with Rama to Manila were City Legal Officer Jerone Castillo, City Hall lawyer Floro Casas Jr., lawyer Jose Daluz III and Rene Mercado.
His critics in the Bando Osmeña-Pundok Kauswagan (BO-PK) said questions about the legality of the lot sales cited in the legal opinion of the Department of Interior and Local Government (DILG) should be taken seriously (See related story)
Under section 15.3 of the SRP bidding guidelines, the winning bidder is supposed to give the 50-percent down payment “immediately” upon the issuance of the Notice of Award.