Cebu City JV body to choose challengers of FLI proposal (South Road Properties)

CEBU City’s Joint Venture Selection Committee (JVSC) will convene today to decide who will be qualified to challenge the offer to develop a 50.6-hectare portion of the South Road Properties (SRP), if any party submits their eligibility requirements.

So far, only the Provincial Government expressed an interest to challenge Filinvest Land Inc.’s (FLI) unsolicited proposal and secured forms for pre-qualification and eligibility requirements.


But they have not submitted their eligibility documents yet as of last Friday afternoon, City Administrator Francisco Fernandez said.

Interested parties have until 11 a.m. today to submit their documents for eligibility, according to the invitation to apply for eligibility and to submit a proposal published in local dailies last Dec. 8 and 15.

But according to City Ordinance 2154, which prescribes the guidelines and procedures for entering into joint venture agreements with private entities, “private sector participants shall be given at least 30 calendar days from the last date of publication of the invitation to apply for eligibility and to submit a proposal.”

Fernandez said the JVSC will convene this afternoon to open the eligibility requirements, if Capitol or other private parties submit any.

“Today is the deadline for submission, that is why the JVSC will convene. If Capitol and other parties submit and they are found ineligible, then
common sense will tell us that we can decide to award it to Filinvest,” Fernandez told Sun.Star Cebu.

“But the ordinance says they should be given 30 days to apply for eligibility and to submit a proposal so we will most likely wait until then, to give them a chance,” he continued.

If the Province or any other party submits the documents and are declared eligible, they have until Jan. 23 to submit their comparative proposal.

Transparency

Fernandez said that any decision made by the committee regarding eligibility or ineligibility of any party or the awarding of the contract will have to be referred to the City Council for approval.

The ordinance, however, gives the City Government authority to adjust the period prescribed for compliance of the requirements for joint venture activities.

Whether or not the committee will allow interested parties more time, or whether the contract will be awarded immediately to FLI, will be tackled in today’s meeting.

“Notwithstanding, the City Government may adjust said period as may be appropriate for the nature, scope, size and complexity of the proposed joint venture activity. Provided, that the principles of transparency, competition and accountability are observed,” the ordinance read.

FLI has submitted an unsolicited proposal for an unincorporated joint venture with the City Government over a 20-year period. This will provide infrastructure facilities, buildings and other amenities in a central business district type of development involving the construction of 875,000 square meters of building space over a 50.6-hectare area of the SRP.

The firm intends to invest at least P25 billion in the project, which will include “mid-level to ultra high-end” residential buildings, a medium-rise complex, a cluster of high-rise hotels, retirement and medical facility and commercial areas.

FLI’s offer will be subject to an open competitive bidding, and for other private developers of the same stature as FLI to challenge. (LCR)

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Gwen finds South Road Properties better to invest in, says Tomas

The Freeman
December 20, 2008

Cebu City Mayor-on-leave Tomas Osmeña expected Governor Gwendolyn Garcia to decide on investing in the SRP since the province is not “desirable.”

Osmeña, when sought for comment on the recent move of the Province of Cebu in showing their intention over the areas being eyed by the Filinvest Land Incorporation (FLI), said he will just have to wait and see.

“Of course, it is so bati to invest in the province she doesn’t like to live in the province, let’s see,” Osmeña said. Last December, Wednesday, Garcia had a representative to buy a set of eligibility documents from the Secretariat of the Joint Venture Selection Committee prior to the opening of bids on December 23.



Cebu City invited all interested private sector entities and participants to submit a competitive challenge over FLI’s unsolicited proposal over a 50.6-hectare lot at the SRP. FLI committed to compensate the City over a period of 20 years first with a minimum of a P1.5 billion cash payable in the next three years.

Meanwhile the Japan International Cooperation Agency (JICA), funding agency of the SRP wrote a letter to acting mayor Michael Rama, clarifying that their representative did not mention the SRP plan as “unacceptable” during the recently-held workshop of the Asian Development Bank.

Norio Matsuda, chief representative of JICA Philippines, told Rama their representative in the said workshop, Jun Watanabe, did not make such a statement.

“Related to the workshop we were informed that one of the local newspapers in Cebu published the relevant article with a headline ‘Japanese government frowns on projects, planned SRP use not acceptable’. We would like to make it clear on this occasion that our representative on the workshop did not make such kind of statement during and after the workshop,” Matsuda said.

In the workshop, consultants from ADB were already asking for a masterplan which the city government was not able to produce since Osmeña wanted the SRP to be planned according to the demand. — Ferliza C. Contratista/BRP (THE FREEMAN)

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South Road Properties framework plan

Linette C. Ramos
Sun.Star Staff Reporter

PLANS for the South Road Properties (SRP) drafted 15 years ago were amended to suit a mixed land use project and will be submitted to the Japan International Cooperation Agency (Jica) headquarters in Tokyo for approval.

The framework plan, if acceptable to Jica officials in Japan, will be the basis for the planning of utilities for the 302-hectare SRP.



Cebu City Administrator Francisco Fernandez said yesterday that based on their discussions with officials of the Jica-Manila office last July, the latter accepted and approved in principle the changes on the use of the SRP, from an export zone for light manufacturing firms to a mixed land use project.

The City Government’s plan for the SRP, which JICA Manila drafted into a document, will still have to be presented to the JICA board in Tokyo for approval.

Shift

Another change that will be presented to the Jica headquarters is the shift from leasing of SRP lots to selling the properties, which could enable the City to pre-pay Land Bank of the Philippines (LBP) the balance of its 12.315-million yen loan with Jica for the SRP. The LBP is the conduit bank for the loan.

Fernandez said the possibility of a pre-payment to LBP “worried” Jica, because LBP might also pre-pay the loan. Fernandez said, though, that LBP will not make pre-
payments to Jica and will use the money as a revolving fund instead, if the City Government agrees to pay the loan balance in advance.

“There will be a new agreement that will consider the changes of the time. The framework plan we made 20 years ago has to be amended. Jica already agreed that there have been changes, and so the agreement we had with Jica 20 years ago will have to be amended,” Fernandez told reporters yesterday.

Based on the presentation of Mayor Tomas Osmeña and Cebu Investment Promotions Center (CIPC) managing director Joel Mari Yu before Jica Manila officials, the latter drafted a new framework plan that will be submitted to their headquarters in the third week of January.

Assumptions

During a meeting with Asian Development Bank (ADB) representatives yesterday, Fernandez said they agreed that the revised plan will also be used as basis for the assumptions needed for them to proceed with planning activities on the utilities, including power and water supply, solid waste management, wastewater treatment facilities and public transport.

The City and the ADB-Cities Development Initiative for Asia agreed on the need to have certain assumptions on power and water supply requirements, estimated number of workers at the SRP, public transport needs, among others. The assumptions will be based on the JICA plan.

But even the assumptions will have to be flexible enough to allow the City to adapt to changes in the demands of the market and investors who would operate in the SRP, Fernandez said.

“If the new plan is acceptable to Jica, this will also be the basis of the second round of planning workshops with ADB for the utilities. It will be the basis of the assumptions and we have reached an agreement that even the assumptions should be made flexible,” he said.

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CH officials insist South Road Properties should be demand-driven, to meet with consultants

Thursday, December 18, 2008

CEBU City officials will meet with Asian Development Bank (ADB) consultants today to clarify its requirement of a development framework or master plan for the South Road Properties (SRP).

City Administrator Francisco Fernandez said that Mayor-on-leave Tomas Osmeña reiterated yesterday his stance that the 302-hectare SRP will be demand-driven and will respond to the needs of the market, and would not be tied down by a master plan.



He said he was also surprised by the Japan International Cooperation Agency’s (Jica) request for a master plan because it has already agreed that the City Government will only provide “a master plan that is more of a vision, and not a detailed and rigid master plan.”

The official said that the shift from an industrial and light manufacturing export zone to a mixed land use project is acceptable to Jica.

Clarification

Fernandez, who has just reported back to work after a one-week leave, was asked by the mayor yesterday for feedback and recommendations based on the result of today’s meeting.

“We will clarify several things with them tomorrow. Are they going to be firm in their request for a master plan? And what do they exactly mean when they asked for a master plan?” he said yesterday.

Consultants of the ADB-Cities Development Initiative for Asia (CDIA) asked city officials for a master plan or development framework plan on the SRP, which they said they will need so they can proceed with pre-feasibility studies on the utilities and infrastructure needed at the SRP.

“I think it has to be clearly pointed out to them that they are our consultants. They don’t make decisions. As consultants, they’re supposed to give us their good and bad thoughts and we will decide accordingly. Their recommendations have to be mutually accepted,” Fernandez said.

Acting Mayor Michael Rama, City Planning and Development Coordinator Nigel Paul Villarete, Fernandez and other city officials will meet with the ADB consultants this morning.

Technical aid

During the workshop on CDIA’s Priority Infrastructure Investment Plan (PIIP) for the SRP last week, a Jica representative also asked for a master plan of the mixed land use project, which they will submit to the JICA board, along with a proposal for technical assistance for the utilities.

“I’m a little bit surprised about Jica’s request for a master plan because last July, we thought we came to terms that the Manila office had to present to the Jica headquarters the changes happening in the Philippines, a new master plan in quotation marks. We agreed that it cannot be a rigid plan,” said Fernandez.

The Jica representative said the City already presented a plan before the loan agreement was approved, but the plan was for an export zone for light manufacturing firms. “The original purpose of the SRP was for industries and manufacturing firms but that is no longer what the market needs. And the shift to a mixed land use was acceptable to the JICA head in Manila. They fully understand that the realities have changed,” Fernandez added. (LCR)

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Filinvest still to pursue P80 B South Road Properties investment

The Freeman
December 16, 2008 12:00 AM

Cebu City mayor on-leave Tomas Osmeña said the Filinvest Land Inc. will still pursue its P80 billion investment at the South Road Properties despite the opinion of Asian Development Bank (ADB) consultants that the SRP lacks a land use master plan.

“Don’t listen to them. They don’t know what they are talking about. Filinvest will start project without them,” Osmeña said yesterday.

The mayor, who is still in the United States, said he knows what is acceptable and what is not.

The ADB consultants have suggested that the SRP’s land use master plan should be completed first before the lots will be sold.

They explained that infrastructure utilities such as roads, drainage systems, electricity and water lines should be identified first because it would be difficult to put them up once the lots are already sold.

But Osmeña argued that “If we followed a so-called master land use plan, the SM City mall would never be there. Why? Because it was never in the master plan as a matter of fact, to accommodate SM, we had to destroy six hectares of city roads, side walks, streetlights, drainage and electrical lines.”

He said the hiring of those ADB consultants are just a waste of time, saying “let them show their past accomplishments if any.”

The FLI had proposed for a joint venture with the city to develop a 50-hectare lot at the SRP.The firm will pay the city P1.5 billion for 10 hectares of the lot while the city will receive 10 percent of the gross income from the rest of the lot.

In his argument, Osmeña asked that “was the Cebu International Convention Center originally part of the master plan of the Mandaue reclamation project? No way.”

He even suggested that ADB should hire experts from Osaka Power or Tokyo Power regarding the district cooling, or Singapore Power for electrical distributor.

Osmeña said the city will not put on hold projects at the SRP just to wait for the completion of the study conducted by the ADB consultants.

He said the ADB has not extended a single development loan to the Philippines for the past several years even though it is based in the country. “That’s a reflection of their competence.” — Rene U. Borromeo/LPM(THE FREEMAN)

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BRT advocate offers to help in South Road Properties design, bus system

Monday, December 15, 2008
Linette C. Ramos
Sun.Star Staff Reporter

ASIDE from two foreign funding agencies, Cebu City Hall might also get some help and input for the South Road Properties (SRP) from one of the world's leading mass transport system advocates.

Former Bogota City, Colombia Mayor Enrique Peñalosa has expressed interest in making a design proposal for the SRP.


In a recent visit, he has said that the 302-hectare SRP, which could transform Cebu, "could become what Manhattan is to New York or what Makati is to Manila."

The former mayor, who introduced the Bus Rapid Transit (BRT) in Bogota, has written City Planning and Development Coordinator Nigel Paul Villarete, Peñalosa offering what he could do.

In his letter, Peñalosa said the SRP "is probably the most exciting project" he has seen in the many cities he has worked in, and that it could transform Cebu and the Philippines.

"I work with a great team of some world-class urban designers from the London School of Economics, and I would love it if we could make a proposal for SRP's design. SRP could transform Cebu, the Philippines and have a profound effect in Asia's urban development," he said.

Peñalosa, though, said the City Government should incorporate new urban design elements that will make the SRP unique and better than Makati or Manhattan in several aspects.

Maximum gain

"A rapid but careful and comprehensive scheme can also be devised in order to ensure the maximum financial gain to Cebu City from the sale of the land. It should be a project that makes Cebu more attractive for international investors and tourists. It should also be accessible to all citizens of Cebu for their enjoyment," he said.

Villarete said that although Peñalosa's ideas and proposal were given unofficially through an e-mail, the City is willing to consider them.

Among other things, Peñalosa said he imagined the SRP to have a pedestrian waterfront around the reclaimed land, bicycle lanes, parks, marina, waterfront promenades, plazas, and the BRT system.

"Cebu's BRT should go across SRP and small feeder buses could bring passengers from different points to the BRT stations. Mayor Tommy Osmeña's vision of having no cars in the island may be too radical, but certainly cars could be restricted," he suggested.

Despite some differences in their ideas on how to go about the planning of SRP's utilities, Villarete believes the City can still work with the foreign consultants conducting studies on the infrastructure needed at the SRP.

He said he would rather wait for the succeeding workshops early next year to find out what direction the technical assistance will take.

Assistance

The Asian Development Bank-Cities Development Initiative for Asia (ADB-CDIA) has provided the City with a $499,000 grant in technical assistance in studying the utilities and infrastructure requirements of the SRP.

ADB and the Japan International Cooperation Agency (Jica) may also be tapped for the funds needed to implement the recommendations of the consultants, if the City Government decides to accept them.

During a workshop last week, though, ADB and Jica representatives said that unless the City can provide a development framework or a master plan for the SRP, their agencies might not be able to provide funding.

Their comments upset Mayor-on-leave Tomas Osmeña, who said that he has long planned some of the utilities without any new input from both ADB and JICA.

"I really think that it will work out all right, it's just that there were some insistence from both sides; but we are going to work it out…. It's really up to what will happen in January, when the consultants will meet to thresh out their concerns for the studies to proceed," Villarete said.

He said he is happy that ADB has funded the project development and pre-feasibility studies in identifying the utilities.

"But we don't have to comply with anything. Yes, there is a technical assistance but it (results) is not something that should be forced on the City if it's against its will," he added.

Acting Mayor Michael Rama yesterday said he would meet Villarete and SRP Chief Operating Officer Nagiel Bañacia to discuss the outcome of the workshop.

"I will check with them on what were the feedbacks during the workshop and let's see what needs to be done. I don't want to add anything to what Mayor Tom said; he
also has a point, but I will leave it at that," he said.

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Don’t Tie Down South Road Properties to Master Plan: Tomas

Saturday, December 13, 2008

CEBU City officials and the marketing arm of the South Road Properties (SRP) assured they will comply with the terms and conditions of the loan agreement with the Japan International Cooperation Agency (JICA).

Acting Cebu City Mayor Michael Rama also assured JICA that the City is “not skirting substantially the original plan for the SRP.”


It’s just that the times have changed and the City is doing the most practical thing, which is to make the SRP profitable for the City to pay its loan obligation.

Cebu Investment Promotions Center (CIPC) Managing Director Joel Mari Yu said they are prepared to allot a portion of the 302-hectare property for light manufacturing firms, which was the original purpose of the SRP before the loan agreement was approved.

Mayor-on-leave Tomas Osmeña also said that even if the SRP has shifted from being purely an export zone for manufacturing companies to a mixed land use project, the developments will create jobs, which is the main objective of the SRP.

“It is demand-driven. We listen to what the locator has in mind and if it’s good for Cebu, we will find a way as soon as possible,” he said in a text message, when asked if the SRP will still have room for manufacturing firms.

External

“Global conditions will dictate the ultimate direction of the SRP. Our first joint venture requires the construction of 875,000 square meters of finished buildings and condominiums. How you can build this without creating jobs means that we will use robots? That’s the first step. The usage of these buildings will not require jobs? Why? Will these buildings be serviced and occupied by robots?” said Osmeña.

Osmeña was reacting to an earlier statement of a JICA official who said that compared to manufacturing firms, hotels and condominiums might employ fewer people after the construction period.

(City Planning and Development Coordinator Nigel Paul Villarete corrected Sun.Star Cebu’s headline yesterday on the JICA official’s statement.

Meanwhile, former Cebu City mayor Alvin Garcia said he expects the offer of Filinvest Land Inc. (FLI) to develop a 50.6-hectare portion of the SRP will not materialize, given the lack of a master plan for the project’s use.

In yesterday’s “Tapok-tapok sa Kia” forum, Garcia said he has kept on reminding that the SRP requires a master plan and that such a development framework should not be solely up to the buyer or developer of the reclamation project to decide.

“Now, it’s clear that what they (city officials) did was wrong,” said Garcia.

Still valid

“I think that some people at the City Hall know that a master plan is important. Karon kay wa na man ilang amo, ila na i-implementar…maghimo na gyud og (Now that their boss is away, they are implanting it. They are working on a) master plan.”

In a phone interview yesterday, Yu said the SRP can accommodate manufacturing firms anytime.

Although the SRP was originally intended as an export zone, the demand for factory spaces here has dropped when manufacturing firms decided to transfer to Vietnam and China.

“The original intention is still valid. But in the last three years, not a single foreign direct investment came to Cebu. In the last five years, there was only one. A sizable amount of land at the SRP is still not negotiated, we can allot space for manufacturing firms that might want to locate there. If it has to happen, we are ready for that,” he told Sun.Star Cebu.

Yu and Villarete said the City will also comply with the loan agreement that requires the City to retain ownership of 49 percent of the SRP until it can fully pay for the 12.3-million yen loan made in 1995.

Aside from Filinvest Land Inc.’s (FLI) proposed condominiums and office buildings, Osmeña said that Bigfoot Entertainment’s project is also a high priority because it’s a prestigious industry with “livelihood impact and technology transfer.”

Priorities

Retirement and medical tourism facilities, a 15,000-seater coliseum, corporate headquarters, postgraduate schools and an international yacht club will also be a priority.

“Whatever Jica’s comments are, I challenge JICA and the Philippine Government to show a better Official Development Assistance project than the SRP among hundreds that they funded. I will show the Japanese taxpayers that they did not waste their funds on this. Just their best project in the last 30 years and compare it with the SRP. I promise to defend and win the argument. Hindi tayo mapapahiya,” Osmeña said.

Rama, for his part, said the City is leaning toward having a master plan on how it hopes to develop the property.

The acting mayor also said he could not believe that a JICA official would say that the planned use for the SRP is “not acceptable.” (Editor’s note: He was referring to the headline, not the story’s text.)

“I’m a little bit surprised that there is such a statement attributed to JICA. I wish and I hope that Jica was taken out of context. Dili man ta unmindful unsa’y original plan,” he said.

He said the offer of Filinvest Land Inc. “may not be for massive employment generation, but it has a domino effect on the economy.” (LCR/With GMD & RHM)

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Planned South Road Properties use ‘not acceptable’

NOT having a development framework or a master plan and a governance structure for the South Road Properties (SRP) would cost the Cebu City Government a lot, including foreign funding for utilities and other infrastructure within the 302-hectare facility.

The Japan International Cooperation Agency (JICA) reiterated yesterday the Asian Development Bank’s (ADB) request for a development framework or plan, so it can justify to the Japanese Government the shift in the use of the reclaimed properties.

JICA granted the City Government a 12.315-million yen loan in 1995 to develop the SRP into an export zone for light manufacturing firms.

While residential condominiums and commercial centers in some portions of the SRP may still be acceptable to them, JICA representative Jun Watanabe said a larger
part of the SRP should be used for developments that have a high potential for creating jobs, like manufacturing firms.

Watanabe reminded city officials yesterday of the terms and conditions of the SRP loan, after hearing about unsolicited proposals to put up residential condominiums,
malls and office buildings in the SRP.

He said it might not be acceptable to the Japanese Government if the City and investors develop 70 to 80 percent of the total land area for projects that have low potential for creating jobs.

“It’s basic that we cannot allow private usage (of land) in the SRP, for example gambling and hotels, that kind of private activity. We understand and we know these kind of private activities have to be done... but to what extent this kind of private activity will come is another matter,” he said during the Priority Infrastructure Investment Plan
(PIIP) workshop yesterday.

Balance

“For example, 80 percent of land will be used for private and 20 percent is for public, maybe this is questionable because as explained, the SRP has been developed through the money of the Japanese taxpayers. They will ask why Japanese people’s taxes here are used for the private companies. But for example, 80 percent is used for public and 20 percent is used for private, we can accept that kind of private usage,” Watanabe said.

In an interview after his presentation, he explained that by public use, he referred to development projects that will create a large number of jobs even after construction.

He added that a zoning and framework plan is needed also so he can justify to the JICA board the utilities needed for the SRP, and how to develop areas for information technology buildings, commercial and residential.

It is indispensable to their operations, he said, because the board cannot accept their proposal without a plan.

JICA is one of the funding agencies being considered for the setting up of the utilities.

On paper

“There was no master plan presented to us. We know the ideas of Mayor (Tomas) Osmeña for the SRP but it has to be a written document. The master plan was already prepared before the loan agreement but at that moment, it was mainly for manufacturing.”

“But the situation has changed and with this change, they should have a master plan because it is necessary for us to justify why the City is now going into IT, tourism and not manufacturing,” Watanabe said.

“Commercial activity can be acceptable but it should be explained that it will create jobs,” he continued.

Watanabe admitted, though, that limitations on land use would discourage investors from the SRP, which is why he will consult the board on what will be acceptable to them.

For his part, ADB-Cities Development Initiative for Asia (CDIA) Program Manager Michael Lindfield said that without a development framework, the ADB will not be able to proceed with the feasibility studies for the infrastructure needed, like solid waste management, district cooling, public transport, waste management and disposal.

Long-term

“Unless we have a coherent plan that is agreed on by the local government, potential developers and infrastructure suppliers, and unless we have a government structure, meaning some way of managing the SRP on a sustainable basis, then it will be very difficult for us to plan the next phase in terms of infrastructure and to finance it because we need to know that there is a viable and sustainable way of managing the infrastructure in the long term,” Lindfield said.

In a separate interview, City Planning and Development Coordinator Nigel Paul Villarete said what is important in drafting the development framework is for the City to still have flexibility in implementing projects, and not be tied down by a detailed master plan.

“What we need is a general development framework that will allow you to have a certain idea on what kind of development you will have in your domain, and at the same time some flexibility to adjust to global changes in the future. We just need a guide,” he said.

Lindfield also cited the need for an organization or management structure that will make sure that those services will be at the SRP on a long-term basis.

While they will help lay down before February the framework plan, which will be used for planning the infrastructure needed at the SRP, he said they can only recommend some inputs. It will still be the City Government that will approve ordinances on the framework.

Lindfield also pointed out the need for a government structure to balance the interests of the City Government and the private investors, and to make sure both parties comply with their obligations in development projects.

“We can’t proceed unless we have a viable framework plan and a government structure. The pressure is on because the City already has some unsolicited bids in process. We need something concrete by February, otherwise it delays the proponent and proposals,” he added.

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City urged: Firm up plan for South Road Properties’ infra, utilities

Thursday, December 11, 2008
Linette C. Ramos
Sun.Star Staff Reporter

FOREIGN consultants recommended yesterday the creation of concrete plans for utilities and infrastructure at the South Road Properties (SRP), before the Cebu City Government sells or develops other areas of the 302-hectare facility.

Consultants of the Asian Development Bank (ADB) are concerned about the development of SRP lots into commercial, recreational, medical and condominium complexes even before a defined plan on roads, transportation and other utilities are laid down.

John Olof Vinterhav said, though, that he does not see a need for a moratorium on the sale and negotiations involving SRP lots, since their study will be completed in a year’s time.

A team of around 15 foreign and local ADB consultants led by Vinterhav started yesterday the project development for the Cities Development Initiative for Asia’s (CDIA) Priority Infrastructure Investment Plan (PIIP) for the SRP.

They will study the appropriate public transportation and road network, water supply and wastewater treatment, solid waste management and disposal, district cooling and power distribution.

Vinterhav said that as a consultant providing technical assistance, he would have preferred that they made the study on the utilities and infrastructure needed at the SRP before any development started.

Bigfoot Entertainment has already constructed and started operations in their three-hectare leased property. Filinvest Land Inc. (FLI) is also planning to develop a 50.6-hectare area, which will be bid out later this month.

“There is no need for a moratorium because we were told that there will be no sale in the next six months. We would have preferred that the FLI proposal didn’t come but it’s there already. Anyway it’s possible to do a planning even if the FLI offer is finalized,” he told reporters yesterday.

The consultants raised their concerns during the PIIP visioning and scoping workshop at the Waterfront Cebu City Hotel, which city officials and Cebu Investment Promotions Center (CIPC) Managing Director Joel Mari Yu also attended.

“If I were the one to decide, I would say don’t close any deal unless you can safeguard that there is flexibility, that the City can get back a piece of land that might be needed for utilities. But Cebu City is the owner of the property, they can do whatever they want to do. But as the provider of technical assistance, my advice is for the City to consider our
recommendations before they do anything, that they don’t close any deal before the plans are finalized,” said Vinterhav.

They were specifically concerned about a situation in the future when the City might have to set up bus terminals or a road networks on a property that has already been purchased or developed.

But Yu said the absence of detailed planning on the exact location of utilities and infrastructure does not bother them.

The City will also continue negotiating with SM Prime Holdings, Ayala Land and Pueblo de Oro, and will continue the bidding for the FLI offer.

Yu said that in all of CIPC’s negotiations with interested buyers, he has informed them of the provision in the sale, lease or joint venture contract that will allow the City to buy back any property that will have to be used for utilities and infrastructure.

“If the consultants can define now what area they want to keep for the utilities and infrastructure, it’s very easy to modify the contract. The build-up time is two to three years, we can still change the layout, dili pa madaot ang locator ana,” Yu said.

He also said that the recommendations of the consultants can always be incorporated into the individual master plan of each locator or developer.

“We don’t need to wait for the results of the ADB study. We can just amend the contracts according to the input of ADB that we want to accept from the consultants,” Yu continued.

Also during the workshop yesterday, Yu said the SRP was funded by the Japan International Cooperation Agency (JICA) in 1995 to be developed into an export zone for light manufacturing companies.

But because of the manufacturing firms’ preference for Vietnam and China over Cebu, they shifted into a mixed land use development.

He said, though, that the City and the CIPC, the marketing arm of the SRP, will still set aside some 50 hectares for light manufacturing companies.

Other developments in the SRP are the high-end retirement facility, medical tourism facility, University of the Philippines’ graduate school program, a stadium or exhibition center, mall, recreation facilities, a promenade, a marina and high-end condominiums.

In a teleconference during the workshop, Mayor-on-leave Tomas Osmeña said he envisioned the SRP not just as a revenue-generating project, but one that will create jobs, and bring in tourists, expatriates and corporate headquarters to Cebu.

“There are many possibilities for the SRP but one thing I don’t like it to be is a real estate business. Cebuanos want something more, something better. Hopefully, the time will come when we will be able to bring in corporate headquarters to the SRP,” he told the participants.

Osmeña had just arrived at his rented apartment in Houston, Texas from the M.D. Anderson Cancer Center, where he completed the second cycle of his chemotherapy, when he addressed the consultants and city officials.

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Kawit Island now officially part of South Road Properties

The Freeman
Updated December 10, 2008 12:00 AM

CEBU - The Kawit Island at the South Road Properties has been reclassified as an alienable and disposable land and has been removed from the administration of the Department of Health, said Malacañang in a letter sent to Mayor Tomas Osmeña.

The letter, sent by Malacañang Records Office Director Marianito Dimaandal, attached with it a certified true copy of Proclamation 1505, which amended an Executive Order 43, the executive order issued in 1904 that declared the island solely for quarantine use and maritime hospital services by the Chief Quarantine Officer of the DOH.

President Gloria Macapagal Arroyo issued PP 1505 in May this year upon recommendation of the Department of Environment and Natural Resources.

PP 1505 has also formally declared the island as part of the SRP and under the direct administration of the city government.

With this development, the city government and the Asian Development Bank – Cities Development Initiatives for Asia will hold today a conference to kick off the Priority Infrastructure and Investment Plan of the SRP.

At least 30 stakeholders are expected to attend the two-day conference, which will serve as a “visioning and scoping activity of the various project stakeholders,” said SRP Chief Operations Officer Nagiel Banacia.

Prospective investors and project counterparts from various offices of the Cebu City government are also expected to participate in the event.

Mayor Tomas Osmeña who is in the United States for chemotherapy treatment for his cancer will share his vision of the SRP through a teleconference.

Meanwhile, Joel Mari Yu, General Manager of the Cebu Investment and Promotions Center will tackle updates on marketing activities for the SRP such as projects investments and pending Negotiations.

City Planning and Development Officer Nigel Paul Villarete will talk on the “Role and Function of the SRP in Cebu City and Metro Cebu Development” while John Olof Vinterhav will talk in the “Rationale of the PIIP”.

Afternoon today, delegates of the conference will participate in a tour to the North Reclamation Area, the Sugbo Building, the Desalination Plant, Bigfoot Studios, Inayawan Landfill, Talisay South Road and Banilad- Mandaue areas.

Tomorrow, Jun Watanabe of the Japan Bank for International Cooperation will talk on the strategic framework master plan of the SRP while a representative of the Metro Cebu Water District will discuss the project’s water resources management action plan.

Delegates would also get to participate in workshops, which would climax with the presentation of outputs during the plenary.

Osmeña earlier said he plans to lease part of Kawit Island to selected agencies.

Before it became part of the SRP, Kawit Island was once less than 10 kilometers from mainland Cebu and had a total land area of 39,854 square meters.

Among the structures in the island are the building of the Association of Barangay Councils, SRP Administration Building, and the Office of Senior Citizens. – Ferliza C. Contratista/JMO (THE FREEMAN)

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Nalzaro: Capitol’s revenge (South Road Properties)

Bobby Nalzaro's column in Sunstar
Bobby Nalzaro

I AGREE with Mayor-on-leave Tomas Osmeña that nobody, not even the Provincial Government, can dictate Cebu City Hall on what to do with the South Road Properties (SRP). The mayor issued this statement in reaction to Rep. Pablo John Garcia’s view that Filinvest’s offer to the City is illegal and disadvantageous to the government.

Gov. Gwen Garcia’s younger brother said the purchase of 10 hectares of SRP lots should be done through competitive bidding and not a Swiss challenge. And to be fair, the City should separate the purchase from the joint venture to develop 40 hectares of SRP lots.

Garcia, being a bar topnotcher, may have some basis to his claim. But as far as Tomas is concerned, he doesn't care whether the Filinvest offer is disadvantageous to the City or not so long as he can raise revenues from the sale. I am sure that when the offer was reviewed, City Hall lawyers studied its possible legal complications

Filinvest is not also foolish to enter into a transaction with the City Government if it is illegal. The firm, a leader in land developing, is protecting the image and prestige of the company. It will not engage in illegal and questionable transactions.

I already wrote in a previous column that Capitol’s announcement that it would challenge the unsolicited proposal of Filinvest is questionable. I now think Capitol is not really serious in its offer. What will it do with the lot? And of all the SRP lots, why is it interested in those coveted by Filinvest?

Capitol’s motive is revenge. It has something to do with the city's decision to prohibit Capitol from developing its Ciudad project in Banilad.

By challenging Filinvest’s proposal, Capitol can already legally intervene even if it loses in the bidding. It acquires legal personality to go to the court and raise legal questions. If it won’t participate in the bidding, it has no basis to go to court questioning the deal.

I am sure the legal issues now raised by Rep. Garcia will be the same issues that will be raised by Capitol in court. And if there is a pending case, the implementation of the project will be delayed. Worse, Filinvest might withdraw because of some legal hassle.

And if the project is delayed or Filinvest withdraws, the City Government cannot raise revenues. Mapurnada ang income ug commission ni Tomas, kun duna man. Panglawgaw ra gyod nang ila. Ila lang palaguton si Tomas.

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CH gives go-signal to FLI’s P25-B proposal; officials still mum on Capitol’s bid (South Road Properties)

Linette C. Ramos
Sun.Star Staff Reporter

FILINVEST Land Inc. (FLI) will infuse a total equity of P25 billion, not P80 billion, in the joint venture with the Cebu City Government to develop a 50.6-hectare portion of the South Road Properties (SRP).

Even with limited details on the results of the negotiations between FLI and the City’s Joint Venture Selection Committee (JVSC), the City Council authorized the committee yesterday to proceed with the publication of FLI’s proposal, and to invite private entities to challenge it.

The special council session did not answer questions on whether local government units like the Provincial Government will be allowed to participate in the competitive challenge.

The council’s authorization to publish will allow the JVSC to collect P250 million from FLI later this week, before the invitation to pre-qualify and to submit a comparative proposal is published on Dec. 4 or 5.

City Administrator Francisco Fernandez said last night that FLI committed to invest an equity of only P25 billion for the project, as specified in the pre-qualification requirements.

FLI committed to construct 875,000 square meters of building space through an unincorporated joint venture with the City over a 20-year period, covering 50.6 hectares of land.

High-end medium and high-rise condominiums, office buildings, a retirement facility, commercial and recreational areas will be put up at the prime waterfront lots and properties along the South Coastal Road.

“The equity that they are committing is P25 billion. They only need to raise P25 billion to start the project and mao ra na ang ilang patuyok-tuyokon and at a certain point, it will reach P80 billion. So P25 billion ra sad ang kinahanglan sa mga challengers ana,” Fernandez told Sun.Star Cebu.

During the session, Councilor Nestor Archival asked the JVSC whether or not local government units will be allowed to participate in the joint venture, considering that the ordinance prescribing the joint venture guidelines covers only private entities.

“We would rather not comment on that. We will wait if there are proposals from local governments and if there are, I think that is when they would tackle it and consult legal luminaries and the city council. Until the deadline for the submission of proposals, it would be better if the JVSC refrains from commenting on that controversial matter,” Fernandez said.

A prospective challenger, the Cebu Provincial Government, did not attend the session.

‘Director’

“I am sure it (Filinvest presentation) will be covered by the media. We will make our reactions to the proposal after the meeting,” said lawyer and Capitol information and revenue generation consultant Rory Jon Sepulveda.

The Province also hit back at Mayor Tomas Osmeña, for saying that the Capitol cannot direct the affairs of the City Government, particularly in negotiations for the sale of SRP lots.

“At any rate, para sa Kapitolyo, we know that we cannot direct the city. There is only one director for the city and he’s doing his direction now through the use of his cellular phone. We don’t wish to become a director,” Sepulveda told a press conference.

Osmeña was reacting to the statement of Rep. Pablo John Garcia (Cebu Province, 3rd district) that the sale should be done through a competitive public bidding, and not a Swiss Challenge that violates the Local Government Code. He has also said the purchase of 10 hectares should be handled separately from the proposed joint venture to develop 40 hectares.

Sepulveda criticized a statement from the “director from Texas” that the City is simply following the National Economic Development Authority’s (Neda) guidelines on the
sale of SRP lots.

“Unfortunately, the director from Texas is not a lawyer. I’m telling him now he’s wrong. These Neda guidelines are not applicable to a local government unit,” he said.

Review

Businessman Crisologo Saavedra, who attended the presentation at the council session, said he will scrutinize both Filinvest’s proposal and the Provincial Government’s challenge.

“This is for the good of the Cebuanos and as part of my advocacy against corruption,” said Saavedra, who has filed cases at the Office of the Ombudsman to question allegedly anomalous government transactions.

At the session, Fernandez also told the council that FLI committed to compensate the City over a period of 20 years, including a minimum payment of P1.5 billion in cash, payable within the first three years.

In the joint venture component covering 40 hectares, FLI will also give the City 10 percent of the gross revenues from built condominium units, or a predetermined minimum guaranteed return, whichever is higher.

Fernandez did not disclose to the council the minimum guaranteed return, as the information would be made available only after the eligible bidders have been selected.

“If they are not able to sell any unit, then we get a minimum guaranteed return, which shall be over and above the price of the lot. But if they are able to sell, then we get 10 percent of their sales. This is what we are now offering to the public, for other private entities to challenge,” he told the council.

Ownership

Fernandez also assured the council that the City will remain the owner of the lot covered by the joint venture and that Filinvest will not be allowed to mortgage the property until it has fully paid for the lots through the annual share of the gross sales.

The JVSC will publish the invitation to bid in major local dailies twice, either on Dec. 4 or 5 and once more seven days after that.

The deadline for submission of eligibility documents is on Dec. 18, while the deadline for the submission of comparative proposals is 30 days after.

As stated in the pre-qualification requirements, any individual, partnership, corporation, firm or consortium, whether local or foreign, may participate in the competitive challenge.

Among other eligibility requirements, the prospective bidder or its affiliates should have at least 25 years of experience in real estate development in the country, and completed and developed a contiguous project of at least 35 hectares for a commercial business district costing at least P10 billion.

Since the minimum amount of the equity needed for the joint venture is P25 billion, the prospective bidder should be able to prove that it has access to an equivalent amount of capital.

If the bidder is a corporation, it must be a publicly listed company in the Philippine Stock Exchange and should have a stockholders’ equity of at least P20 billion. (With GMD & RHM)

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