FLI asks City to keep talks confidential (South Road Properties)

Friday, October 17, 2008
By Linette C. Ramos
Sun.Star Staff Reporter

ON the request of Filinvest Land Inc. (FLI), members of the Cebu City Government’s Joint Venture Selection Committee (JV-SC) will sign a confidentiality agreement to keep negotiations under wraps.

The nine-member JVSC formally received yesterday the detailed unsolicited proposal of FLI to develop a 50-hectare portion of the South Road Properties (SRP).

In a closed-door meeting with the committee members, City Administrator Francisco Fernandez said FLI officials asked them to sign a confidentiality agreement while they negotiate on the terms of the sale and the joint venture (JV).

Agreement

The members of the committee will sign the agreement during their first formal meeting on Saturday.

While they pledged to be transparent on all transactions involving the SRP, Fernandez said they find FLI’s request to be reasonable, since they also need to protect their proposal.

The confidentiality agreement covers all negotiations that will be made until the unsolicited proposal is approved for publication for bidding.

Fernandez, the chairman of the JVSC, said details of the agreement will be divulged to the public once it is approved for publication, which is also the time when FLI will pay the City P300 million in surety bond.

“During the negotiations, everything will have to remain confidential, including the terms and conditions of the agreement, the design and cost of their project, the share of the City in the joint venture, and their market. That’s what the confidentiality agreement covers. If we reject their offer, the details remain confidential,” Fernandez told Sun. Star Cebu.

If there are no challengers to the FLI proposal, the JVSC expects to award the contract to FLI by Dec. 15, 2008.

FLI and Mayor-on-leave Tomas Osmeña already divulged some general information on their plans during the ceremonial turnover of the executive summary of the firm’s
unsolicited proposal during a press conference at the Casino Español de Cebu last month.

But in the meeting and negotiations with the JVSC, FLI will be submitting documents containing the details and specifications of their project, which they intend to keep confidential.

Open

“But once it is published, I assure you that everything will be open to the public. I think their request is reasonable because their only concern is that if this is divulged while the negotiations are ongoing, other challengers might copy their proposal and designs, and it’s very bad business ethics if we reveal it,” Fernandez explained.

Earlier, FLI announced that their unsolicited proposal includes an outright purchase of a 10-hectare lot amounting to P2 billion and the development of 40 hectares under a JV agreement with the City.

Some P80 billion will be invested by FLI to put up several high-rise and medium-rise condominiums, a commercial center, a medical and retirement facility and office buildings in the SRP.

From the JVSC, the unsolicited proposal will be presented to the mayor for preliminary acceptance or rejection.

Documents

If the proposal is accepted in principle, formal negotiations between the JVSC and FLI will start once the latter submits all the documents, including their engineering designs.

“After Saturday, we can already make a recommendation to the mayor to accept the proposal in principle or to reject it. If he accepts, we are given 10 days to finish the negotiations and after that, we go back to him to present our agreement. If he finds it acceptable, then we will publish it for the Swiss challenge,” Fernandez said.

The proposal will be published twice. After the second publication, challengers will be given 30 days to submit their proposals.

Fernandez said that if there are no challengers in the bidding, a contract with FLI will be submitted to the City Council for approval and if approved, the mayor will sign the contract with FLI.

Other voting members of the JVSC are the city attorney, former city administrator Juan Saul Montecillo and the city treasurer.

A representative of the Commission on Audit, the Department of Interior and Local Government, the Philippine Institute of Certified Public Accountants and the Chamber of Real Estate and Builders Associations Inc. also sit in the committee as non-voting members and observers.