Cebu government eyes P3-B proceeds from sale of reclaimed area South Road Properties

By Wilfredo Rodolfo III
Reporter

CEBU CITY—The city government hopes to raise at least P3 billion as it auctions off a portion of its 260-hectare reclaimed property off the Mactan Channel.

The city council last week gave Mayor Tomas Osmeña authority to sell 32 hectares of prime property at the South Road Properties (SRP) through public bidding. The council also allowed the mayor to start negotiating with other companies for a possible lease or joint-venture projects for the rest of the property.

Councilor Jose Daluz II told Business Mirror on Monday that the 32-hectare property, tagged lot 1-A, would be sold to one buyer. The terms of the bidding will be made public later this week, he added.

Daluz, the chairman of the council’s committee on finance, said City Hall is still deciding on the floor price for the property, but said it would be around P12,000 per square meter.

“This property is very valuable because it is the first lot you will see as you enter the SRP. This is very ideal for commercial businesses like malls,” Daluz said.

The money raised from auction will be used for debt servicing as well as for more development projects in SRP to make the property more attractive to investors. Some of the proceeds will also be used for the city’s services.

He said the second authorization given to the mayor would allow the chief executive to discuss terms with the companies interested in putting up commercial or industrial facilities in the area.

The financial terms of deals, however, would have to go through the City Council for ratification, Daluz said.

The SRP, completed in 2001, was built through a ¥6.7-billion loan obtained by the city government with the Japan Bank for International Cooperation. The biennial amortization would run up to 2020.

The national government then contributed about P10 billion for the Cebu South Coastal Road, which straddles through the SRP.

The city government, however, only officially sealed one deal: A four-hectare lease contract with Bigfoot Global Solutions, which plans to build a film studio on the reclaimed property.