Rama hopes to save SRP deals

Cebu City Mayor Michael Rama flew to Manila for the second time this week, still hopeful that he can save a multi-billion-peso sale of  South Road Properties (SRP) lots.

“I wouldn’t want to say anything now. However, I was looking at a situation where we just have to look at it that eventually all is well that ends well. That’s the statement I will make in the meantime,” he told reporters by phone.

RAma said he would  call a press conference on Monday  with representatives from highest bidders SM Prime Holdings Inc., Ayala Land Inc. and Filinvest Land Inc. to issue a clear announcement regarding the payment for the lots — an expected P6.75 billion downpayment.

At  City Hall, employees went ahead with a  first Friday Mass without a ceremony for the awarding  of contracts to the developers and 50 percent payment for two SRP lots.

OPTIONS

Lawyer Jose Daluz III, head of the technical working group (TWG) of the committee on awards, said it was a  sad day for Cebu City.

He said he and city attorney Jerone Castillo were studying legal actions against the 10 city councilors who voted last Wednesday for a resolution asking Rama to defer further action on the SRP lot sale.

“The question is – isn’t the council criminally liable – the 10 of them? Because they’re causing injury to Cebu City by passing this resolution suspending the payment. Because if we can’t receive the money, which is due to Cebu City, the interest alone, the cost of money alone is injury to Cebu City,” Daluz told reporters.

Mayor Rama, for his part, said he would  support a  plan to file a case against the 10 councilors.

“It’s a deserving action. It’s an action that should be supported. If the circumstance will warrant, I will give my support for that action. Action has to be done so that lesson will have to be learned,” he said.

Both officials didn’t cite what particular law has been violated, however.

City Administrator Lucelle Mercado, chairperson  of the committee on awards, had to call off  the issuance of notices of award for the lots scheduled yesterday.

She said the three developers cancelled plans for the ceremony and to pay a total of P6.75 billion, representing the balance of their respective 50-percent down payments for the SRP lots.

She said Rama had to fly  to Manila yesterday to attend to some concerns, including a possible meeting with the three developers.

The SM-Ayala consortium, lone bidder for the 26-hectare Calungsod templete lot, and Filinvest, highest bidder for a 19-hectare lot adjacent to its development, postponed payment because of the city council’s resolution last Wednesday.

Without the payment, City Hall employees would have to wait longer for their bonuses.

The city  government would also have to look for other sources of funds to partially finance its P13.6-billion annual budget this year.

Mercado said no new schedule for the payment of the lots has been set.

DISMAYED

She said some employees were dismayed because they have been expecting to receive a month’s worth of salary as Productivity Enhancement Incentive (PEI). The bonus was supposed to be taken from a supplemental budget to be submitted and sourced from the down payment for the SRP lots.

“I would say they are dismayed because the bonus was already announced. But the mayor has been encouraging us that we should work  for public service not for the bonus and perks. They know that eventually, they will be given,” she said.

City Hall  auctioned off two lots, the 26-hectare Lot No. 8 and the consolidated 19.2-hectare Lot No. 7 and Lot No. 17, on June 30.

The consortium of SM Prime Holdings Inc., Ayala Land Inc. and its affiliate Cebu Holdings Inc. made the lone offer of P10 billion for Lot No. 8 while Filinvest Land Inc. made the higher offer of P6.7  billion for the second lot.

Each bidder paid the 10-percent security bond, totaling P1.67 billion, on the same day. The bond was to form part of the 50-percent down payment, which was to be paid yesterday upon the issuance of a notice of award.

Last Wednesday, the City Council voted 9-3 in favor of a resolution urging the mayor to defer awarding the lots over questions about his authority to sell the reclaimed land through public bidding.

Nine councilors allied with the Bando Osmeña – Pundok Kauswagan (BO-PK) and councilor Mary Ann delos Santos, who is being courted by the BO-PK, voted in favor.

This caused the winning bidders to think twice about proceeding with their  down payments.

POLITICS

Daluz said the council’s action was being influenced by party politics.

“It’s very hard to explain that this is good for Cebu City and it’s just blocked for political reasons. We can debate all day about the technicalities and they know,” he said.

Representatives from both bidders said they were still waiting for instructions from their principals in Manila.

“I’m still waiting for developments from my Manila principals,” said FLI vice president for strategic business development Allan Alfon.

SM Prime, the biggest mall developer in the country, is reviewing its next move.

“We have yet to receive any formal notice of the Cebu City Council resolution. As soon as we receive a copy of the resolution, we will study it and decide our course of action,” said Ronald Tumao,

SM vice president for market research and planning.

Daluz said there’s no conflict between the 2014 resolution and the 2012 ordinance, which specified that the SRP lots may be disposed of through unsolicited proposals.

Daluz said section 3 the ordinance states that public bidding can be the mode for disposal as long as there’s prior approval from the council. The resolution allowed them to do so.

A Department of Interior and Local Government (DILG) opinion, however, said the 2014 resolution could not supersede the 2012 ordinance.

“We are outnumbered. That can’t be changed. The DILG should also be circumspect. They should have also looked at the contents whether the resolution amended the ordinance. They didn’t do that. They just said a resolution can’t supersede an ordinance, of course, that’s basic. It was just superficial,” Daluz said.

REFUND

Councilor Sisinio Andales, who voted to defer action on the lot sales, said the winning bidders  have the option to demand refund of their bid bond if the DILG opinion is not revoked nor reversed.

Andales said there is no legal document that binds the bidders to the city because a notice of award has not been issued to them.

He said the inconvenience that the city is now experiencing could have been avoided had Mayor Michael Rama waited for the DILG opinion.

“I believe the city will appeal the opinion of DILG or file a reconsideration or file a case in court to resolve the legal issue. The opinion of DILG is better than the opinion of (Mayor) Mike. He (Rama) should follow the rule of law,” he said.

He said the Aug. 5 resolution asking Rama to defer any further action related to the SRP sales was not meant to derail City Hall services nor was it politically motivated.

BO-PK councilors merely want to make sure that the transaction was legitimate to protect the interest of the city, he added.

On the employees’ dismay over the deferment of their bonuses, Andales said they should not be blamed.

“Asa man diay ang 1.7 billion? Nganong wala nahatag ang productivity enhancement incentive? (Where is the P1.7 billion? Why were the bonuses not given?)” he asked.

“Blame the Office of the Mayor and BAC kay gidali-dali nila pagpahigayon sa public bidding (because they proceeded with the bidding) despite the request of city council to defer for a while the public bidding,” he added.