Capitol to invest in South Road Properties

CEBU CITY -- The Cebu Provincial Government announced Monday plans to go into commercial development in the South Road Properties (SRP), the pet project of Mayor-on-leave Tomas Osmeña, Capitol's top critic. Capitol is also preparing to challenge the proposal of Filinvest Land Inc. (FLI) to develop a 50-hectare portion of the SRP.
"The Province is interested nga maka-invest mi sa among gamay'ng kwarta (in investing our little funds), so we decided to do commercial development in the south district, especially in the South Road Properties," Capitol information and revenue generation consultant Rory Jon Sepulveda said in a press conference Monday.

The announcement was met with surprise by at least one City Hall official. Acting Cebu City Mayor Hilario Davide III wondered why the Provincial Government is suddenly interested to challenge Filinvest's offer when Capitol officials have consistently criticized the SRP.

"Are they serious?... Frankly speaking, I can't help but entertain doubts and surprise. I don't know their motive but if they are serious, let them submit their proposal then we will study it," Davide told Sun.Star Cebu.
Sepulveda said Cebu Governor Gwendolyn Garcia instructed him to draft a request relative to the guidelines of a joint venture with a local government unit (LGU).

Davide, however, said the ordinance that covers the City's negotiations with FLI does not include offers from LGUs.

Davide also said he has not come across any joint venture between two LGUs, or one LGU investing in another LGU.

"The ordinance is silent on LGUs investing in the SRP, there is no provision there that says that an LGU can join the bidding so we have to check first how the City will go about it. This is something novel but we will study their proposal," he said.

Davide, the author of the ordinance, pointed out that as stated in the measure and as announced by Osmeña earlier, any challenger of the joint venture offer of FLI must have the financial and technical capability to undertake the project.

In her State of the Province Address in July, Garcia said Cebu is the richest province in the country, posting P17 billion in assets in 2007 while remaining debt-free.

"We realized that we cannot just sit down idly and do nothing especially ilang gibalik-balik og announce nga wala'y development sa provincial properties," said Sepulveda.

Sepulveda said the proposal was hatched in a meeting with Governor Garcia, Representative Pablo John Garcia (Cebu Province, 3rd district) and Pablo Garcia (Cebu Province, 2nd district) over the weekend.
He said the scheme will be submitted to the Provincial Economic Enterprise Council (ECC) for evaluation and approval.

Sepulveda said Capitol is organizing a team to study the offer. He said the province is prepared to do the Swiss challenge or make another offer.
The Capitol consultant said the Provincial Government is thinking of innovative ways to generate resources rather than relying on traditional taxation.

FLI is proposing to buy a 10-hectare portion of the SRP amounting to some P2 billion and developing 40 more hectares under a joint venture agreement with the City Government.

Its officials said they plan to invest some P80 billion to build several high-rise and medium-rise condominium units, office buildings and a retirement and hospital facility at the SRP.

In a phone interview Monday, City Administrator Francisco Fernandez, also the Joint Venture Selection Committee (JVSC) chairman, said he will check with the committee members Tuesday and the city councilors if the bidding is open to government entities.

Whether or not Capitol is serious with its plan, he said the committee will consider the Province's offer for review once they receive a copy.

"There might be much ado about nothing if they are not serious. They will have to make a substantial deposit of some P250 million once they challenge FLI's offer, and meet other requirements," said Fernandez.

"We also have to check if they are capable of implementing the project. Money is not the only consideration here. The challengers need to have enough experience and have done similar projects in the past. We will have to review the ordinance to check if LGUs are entitled to join the bidding," he added. (GMD/LCR)