Water, electricity in South Road Properties in six months – exec
THE Cebu City government is confident of accomplishing its part of the deal with Filinvest Land Inc. to develop the 50.6 hectare of South Road Properties (SRP).
Francisco Fernandez, chairman of the Joint Venture Selection Committee (JVSC) , said yesterday that the city will comply with the conditions of the joint venture contract worth P25 billion, not P250 million as reported yesterday.
This means that the water and electricity systems will be in place at the SRP within six months.
The joint venture contract was signed on Wednesday by Cebu City Mayor Michael Rama and Filinvest vice chairman Andrew Gotianon Jr.
The signing seals the JV deal between the city and Filinvest.
Under the contract, the Filinvest is given six months to get the necessary permits and start developing the 40 hectares at the SRP in August.
The signing of the contract also means that Filinvest will pay the city within 30 days the P348 million in downpayment for the outright sale of another 10.6 hectares, which was part of the JV deal.
On the part of the city, the JV contract stipulates that the city government should ensure that power and the water system has been installed before Filinvest will start to operate.
But there are such utilities yet in SRP yet.
Fernandez said there is existing wiring for power connection to the Visayan Electric Company but the city government is still negotiating with Veco to supply the electricity at the SRP.
The negotiations were done with Veco because the firm is the franchisee of power for the SRP and all parts of Cebu, said Joel Mari Yu, managing director of Cebu City Investment and Promotions Center (CIPC), which is the marketing arm of SRP.
Yu said Veco, however, will have to pay the city concession if the negotiations will prosper.
Veco will have to pay SRP a concession fee per kilowatt hour because the SRP is a special economic zone, he added.
Yu cited an amount between 20 centavos and 25 centavos per kilowatt hour as power concession fee.
But he said that this figures had yet to be approved by the Energy Regulatory Commission (ERC).
It's a different story for the water utility.
The city government is considering an unsolicited proposal for a joint venture deal for a total concession for water operations within the SRP.
“Total Concession means that they do everything themselves. They will operate, maintain, build, collect, repair and install the pipes at no cost for the city,” Yu said.
He said that the water concessioner will have to pay for everything because they are the ones selling the water in SRP.
They will also be required to pay the concession fee for every cubic meter of water sold at the SRP.
Yu, however, said that the water deal will have to be bidded out unlike the Veco negotiations.
Fernandez said that the city government is evaluating the unsolicited proposal of Mactan Rock Industries Inc. to provide the water operations in SRP.
Fernandez said another investor interested in supplying water at the SRP is Pilipinas water.
The proposals, however, had yet to be discussed and reviewed by the JVSC. If it accepts the proposal, then it will go to the City Council.
Meanwhile, the Cebu City Council said donating a 51,000-square meter lot in the SRP to the University of the Philippines will not be a disadvantage to the city.
City Councilors earlier questioned the UP's financial capability to build a school in the lot.
Councilor Rodrigo Abellanosa opposed the motion to authorize Rama to sign the deed of donation to UP on Jan. 28.
Abellanosa, who owns Asian College of Technology, cited a lot in Talisay City that was donated to UP but has remained unused.
But Yu said that UP is obliged to put up a school building in three years after the deed of the donation is signed or else the property will be taken back by the city government.
Yu said the arrangement which is within the contract between the city and the university is still pending at the City Council's committee on laws and education.
Abellanosa earlier suggested to donate the property to Ateneo University or De La Salle University, which has the capacity to develop the lot.
But Yu said that UP was the choice of Cebu City Mayor Tomas Osmeña because of the school's track record for Information Technology (IT) graduates.
Yu said UP is considered has the best IT training in the country.
Yu said the presence of the university in the SRP increases the marketability of the property.
With a report from Reporter Marian Z. Codilla