Sell reclamation (South Road Properties) lots without bidding?

By Doris C. Bongcac
Cebu Daily News
Last updated 02:17pm (Mla time) 10/23/2007

CEBU CITY, Philippines - To hasten the sale of lots at the South Road Properties (SRP), Cebu City Mayor Tomas Osmeña wants to skip government bidding processes.


Osmeña said government bureaucracy is causing delays in the disposal of SRP lots, so the city government is in talks with the Commission on Audit (COA) to allow the city to sell SRP lots without auction, but at a price approved by the COA.

“The COA is still considering some of our proposals. Our thrust is to maximize what is beneficial to the city,” the mayor said.

At least three major real estate companies are in talks with the city to acquire lots at the SRP, Osmeña said. He declined to disclose details about the companies or their plans for the SRP.

The mayor said the city would not act on the proposals of these companies unless city officials can be sure of what the companies intend to do with the SRP lots. He also said the city would wait for the COA’s approval to skip the bidding process before disposing of any more SRP lots.

The Government Procurement Act requires the national and local governments to auction the disposal of government properties to get the best possible price for it.

Earlier, Osmeña planned to first sell off 30 hectares of SRP land located near its Welcome Hill to quickly pay off the P6-billion loan from the Japan Bank for International Cooperation to construct the SRP. The rest of the lots would then be leased.

On Monday, however, the mayor said the city government may also sell lots other than those near the Welcome Hill because city officials want to be “sensitive of the market conditions.”

“Some investors are eyeing other parts of the SRP,” he said.

If SRP lots are to be sold without going through bidding processes, the price would be based on the market value approved by the COA, the mayor said.

“The price will be determined by appraisal, but I will put a premium depending on what kind of Establishment is going to be operated there,” he said.

Preference will be given to businesses that would not compete with local industries, such as business process outsourcing.

“We are not selling a piece of land. We are selling development, and we are being picky,” Osmeña said.


The mayor added that he does not want the SRP to end up like Mandaue City’s reclamation project, which, he said, has become a “junkyard for surplus equipment for sale.”

“This (SRP) is one area where we want to maintain certain standards,” he added.

Osmeña said he was confident that the city government would be able to meet its target revenues from the SRP.

He said he expects to earn a total of at least P500 million from the reclaimed property by the end of the year.

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Tomas remains very selective in accepting locators at South Road Properties

The Freeman
Tuesday, October 23, 2007

Cebu City might be saddled with multi-million worth of debts but Mayor Tomas Osmeña stood firm over his decision to be strictly selective in accepting from any source, lease or purchase proposals of part of the 295-hectare South Road Properties.

“We’re not just selling a piece of land but development,” Osmeña said in a press conference, emphasizing that he would not just accept any proposals from any business or institution.

The mayor said, “We’re very picky with who we’re dealing with,” explaining that the city will only deal with people who can maintain the standards that has been set for the SRP.

Osmeña admitted that the city has already received several proposals but most of these were turned down. One of the rejected proposals was putting up a stockyard, he said.

He said he would not like the SRP to be like a “junkyard” similar to what happened to the Mandaue reclamation project. “I have to balance it. If I want to be lazy about it, I will just chop it up and sell it,” said the mayor.

So far, there have already been at least three locators, all of which are real estate firms and each of which had proposed to purchase at least seven hectares of the SRP.

These locators still have to undergo scrutiny to ensure that they can create “impact” for SRP and the Cebu economy, and to make the SRP more “marketable” similar to what the Mactan Export Processing Zone and call center businesses have done.

Meanwhile, Osmeña said the city has been negotiating with the Commission on Audit on the legal aspects in dealing with offers from businesses. The city is open to bidding requirements and processes but the mayor said these might “destroy the marketability of SRP.”

“We tried to avoid bidding just like the Philippine Economic Zone Authority,” the mayor said COA would not allow the city to follow the procedures undertaken by PEZA-registered companies.

He said that the city should be “very sensitive to the market price condition. We still bid out but on some bases.”

The city needs to raise P500 million this year to pay its loan from the Japan Bank for International Cooperation that was spent in developing the SRP. — Liv G. Campo/RAEType rest of the post here

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