Tomas, Veco sign power supply accord for South Road Properties

By Marian Z. Codilla, Reporter

A DAY before leaving for the United States, Cebu City Mayor Tomas Osmeña signed a memorandum of agreement with the Visayan Electric Co. (Veco) to distribute power in the South Road Properties (SRP).

The mayor is scheduled to board a 12:45 p.m Cathay Pacific flight direct to Los Angeles together with wife Margot and only son Miguel.



Osmena said he will return to Cebu City on the first week of May after his surgery for the removal of his urinary bladder.

Osmeña, who has stage 4 cancer, attended to his City Hall duties with a full schedule yesterday.

He showed no sign of fatigue and told some reporters it was all right to remove their hospital face masks because he was feeling okay.

Veco agreed to provide electric power to the SRP and charge the businesses in the area the same rate as customers in the rest of Metro Cebu.

The agreement also stated that Veco will pay the city an access fee of P0.20 per kilowatt hour to be charged to the businesses and reflected in their monthly statement of accounts.

Cebu City Administrator Francisco Fernandez said the SRP is considered part of Veco's franchise area so the no public bidding was needed.

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Cebu City Hall, Veco sign deal on supply to South Road Properties power users

THE Cebu City Government and the Visayas Electric Company (Veco) yesterday signed a memorandum of agreement (MOA) for the utility firm to supply power to locators of the South Road Properties (SRP).

Mayor Tomas Osmeña said Veco will just charge the rate it collects throughout its franchise area while giving the city a P0.20 share per kilowatt hour.

Panagbenga 2009 blog

Osmeña, however, failed to mention that the MOA contained a provision where Veco can actually apply for an additional P0.20 as “access fee” from locators, which would be collected once approved by the “regulatory authority.”



It is the Energy Regulatory Commission (ERC) that approves all applications for rate adjustments and other charges by distribution utilities like Veco.

“The Access Fee shall appear as separate line item in the monthly statements accounts from the Distributor (Veco) to the Locators. Distributor shall exert reasonable efforts to obtain the approval from the relevant Regulatory Authority, when
applicable and necessary, for such application,” read Section 3.2, Article 3 (Rates and Billings) of the agreement.

And when open access and retail competition are implemented, Veco will continue collecting the access fee for the City, which “shall first cause each locator to execute an agreement for such continued charging and collection of the access fee.”

The same section also stated that if the “regulatory authority” orders Veco to stop collecting the access fee and return what was collected, the City Government should immediately return the total access fee it received.

Veco president Dennis Garcia and senior vice president and chief operating officer Jaime Jose Aboitiz signed the MOA for the utility company.

Section 3.1 also stated that Veco will charge its existing ERC-approved rates “in the meantime when electrical load of the
Ecozone (SRP) is not yet established.”

“When the electrical load of the Ecozone stabilizes, the Distributor shall apply with the Regulatory Authority, when applicable
and necessary, new rates specific for the Ecozone, and implement the same upon its approval,” it said.

The same portion of the agreement stipulates that an annual review of the electrical load of the SRP will be conducted to determine if there is a need for power rate adjustment, which the Veco should again apply for approval with the ERC.

The mayor said awarding Veco the right to provide power to SRP locators did not go through a bidding because they agreed that the property, though declared as an economic zone, is still covered by the utility company’s franchise.

Yesterday’s signing of the agreement signaled the availability of reliable power source for investors of the SRP, which became the topic of Osmeña and Gov. Gwendolyn Garcia’s renewed word war.

Yesterday, Osmeña again told the Capitol to just file a case if it saw something anomalous in the deal between the City and the Filinvest Land Inc. (FLI).

He said FLI officials felt insulted for being threatened with a congressional inquiry for entering into a joint venture agreement with the City.

“They have never felt being insulted like this. They asked what have they done on the SRP (to merit the criticism). I said nothing, just the vindictiveness of the governor. If they (Capitol officials) saw something illegal, why don’t they just file a case?” Osmeña told a press conference.

He, however, said enticing other investors to the SRP will not be as hard as that with FLI, which took him “four Sinulogs.”

The Sinulog is an annual event held every third Sunday of January in Cebu City.

Rep. Pablo John Garcia (Cebu, third district) has threatened to call a congressional inquiry on the FLI transaction, which involved the outright sale of 10 hectares and a joint venture with the City for 40 hectares.

Rep. Garcia said the deal is anomalous and disadvantageous to Cebuanos. Osmeña denied the accusation.

“I’m very proud of what I have done,” he said, reiterating that the Capitol is welcome to get a copy of the agreement and scrutinize it. (RHM)

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Osmeña South Road Prpoerties pact can stand House scrutiny

By Marian Z. Codilla and Doris C. Bongcac, Reporters


LEGALLY defensible.

So said Cebu City Mayor Tomas Osmeña of plans for a congressional inquiry into the joint venture contract between the Cebu City government and Filinvest Land Inc. on 50 hectares of South Road Properties (SRP).

Osmeña said that while he was unhappy with the call by Rep. Pablo John Garcia for a congressional inquiry, the Capitol's accusations of irregularities were “pure harassment.”

“It's just pure harassment...(the province has) nothing else to do. They can make panglawgaw (a mockery of) the contract but it is very defensible and I am very proud of it,” Osmeña said.



He said he and other officials were ready to face the congressional inquiry.

Osmeña said that while he didn't sign the deal, he constantly negotiated with Filinvest for several years.

The deal between the city and the province is a mixture of outright sale and a joint venture (JV).

The Filinvest will enter into a joint venture with the city if it will allow them to purchase a 10.6-hectare portion in Pond F of the SRP.

Filinvest is also required to enter into a profit-sharing arrangement with the city on the 40-hectare property.

Garcia said he received text messages from several lawmakers who supported the inquiry, excluding his father Deputy Speaker Pablo Garcia of Cebu's second district.

“They (the lawmakers) said they are ready to sign the resolution and it encourages me because without asking them, they volunteered to help. But I need to get their signatures first,” Garcia said.

He said the inquiry will determine if the city complied with all the laws in its dealings with Filinvest.

“If there is something anomalous, the guilty party will not only be public officials who signed the deal but also private people who pushed for the deal. The inquiry is needed so that future investors will avoid entering into agreements that are anomalous,” Garcia said.

The inquiry, he said, would also guide future investors “on what can be done and what can't be done to avoid any criminal liability.”

Garcia said he will push for the inquiry on the Filinvest deal when Congress resumes session on April 13.

He said that he may later request the Senate to also look into the deal.

Garcia said he would not name the Cebuano legislators who sent him text messages, saying Osmeña also has as an ally in Congress Rep. Raul del Mar of Cebu City's north district.

Rep. Ramon “Red” Durano VI of Cebu's fifth district said he needs to familiarize himself with the issue first before making a decision.

Rep. Antonio Cuenco of Cebu City's south district said he also wanted to know the purpose behind the inquiry.

Rep. Garcia said a congressional inquiry was because the Capitol was not getting “straight answers” from Cebu City Hall.

He suspects that a city lawyer was not involved in the drafting of the JV agreement, the reason why it favors Filinvest's interests.

“Maybe if they are under oath they will tell us what really happened,” Garcia said.

He said plunder charges would be filed against certain persons if the results of the inquiry showed there were anomalies in the billion peso Filinvest deal.

Cebu Gov. Gwendolyn Garcia said she wanted to know the conditions behind Filinvest's acquisition of the 10.6 hectares.

She also wanted to know why the Capitol was not allowed to challenge Filinvest's unsolicited proposal despite being financially capable.

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Cebu City Hall, UP seal partnership in South Road Properties

By Jully Venus Cuizon, Correspondent


A well-paying job in a call center and a chance to earn a master's degree in the same work site is a “strategy” that may pay off for Cebu City and the University of the Philippines.

If this attracts the “brightest workers” in the region, business is sure to follow.

Five hectares of reclaimed land in the South Road Properties (SRP) were donated to the state university, which will build a graduate school within the next three years.

As a condition, UP Visayas Cebu Campus will offer a master's degree in business administration (MBA) evening program and continuing education in the English language.

UP President Dr. Emerlinda R. Roman and Cebu City Mayor Tomas R. Osmena signed the Memorandum of Agreement (MOA) on the donation of 51,372 square meters of land yesterday.

“We are firmly establishing our right and competitiveness of Cebu in the future,” said Osmeña during the signing ceremony at the Social Hall of the Cebu City Legislative Building.

“I would like to see the day when Cebu will be producing 3,000 MBA graduates a year and all employees of call centers. These services will be offered to regional headquarters in Singapore, Hong Kong, Malaysia and other parts of Southeast Asia whose workers will come to Cebu for their master's degrees.”

Roman said UP would move quickly to build the school and will likely offer the MBA program this June, starting with classes in the existing UP Cebu campus in Lahug.

She said she and other UP officials were impressed with the mayor's dream “to make Cebu the first city of choice in the country and not just an alternative to Manila” and that UP has a role here in human resources development.

Before the signing, Mayor Osmeña sat down with the UP officials and suggested ways to partner with the private sector to get the facilities and programs up and running.

Present in the signing were Councilor Hilario Davide III and other city councilors, UPVCC Dean Enrique Avila, members of the Board of Regents, visiting UP officials from Diliman, businessman Manuel Go, SRP Marketing Director Joel Mari Yu.

Another condition of the deed of donation is that UP shall consider the project as its flagship Centennial project to offer programs in the fields of computational science product design and packaging, communications design, management, sciences, mathematics and the arts and humanities for the Visayas and ASEAN regions.

UP shall not convey in whole or in part the property to any third party. The deed of donation was approved by the City Council on March 4, 2009.

In his speech, Mayor Osmena said the partnership is a bold step for Cebu City and UP to make Cebu more “competitive” in a globalized economy and improve the workforce in Cebu and was an initiative being taken “without waiting for the central government” to act.

The mayor said he would like to see “educational courses geared to the lifestyle” of Business Process Outsourcing (BPO) workers. For example, an employee who gets off a graveyard shift could just go downstairs from his office to attend an MBA class because the schedule fits his reporting time.

He said BPOs abroad would favor having their employees get an affordable MBA degree in Cebu where workers have good people skills and a desire “for a better life.”



“The city government is not using SRP simply as a business of real estate. We want to do something extra with it and as I promised, we are looking for ways and means to help develop the economy of Cebu.”

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Wenceslao: Killing South Road Properties' potentials

Bong O. Wenceslao

THE controversy over the Cebu City Government’s deal with Filinvest Land Inc. to develop a portion of the South Road Properties (SRP) has just gotten interesting, what with Capitol firing questions at will from the trenches. The biggest offensive would definitely be the House inquiry that Rep. Pablo John Garcia is preparing.

Let us see how a City Hall with “only” Acting Mayor Michael Rama (Mayor Tomas Osmeña is set to go back to the United States for surgery) at the helm would counter that assault. Will Reps. Raul del Mar and Antonio Cuenco man the ramparts in Osmeña’s defense by blocking the initiative at the House of Representatives?

I won’t dwell on who got the commission from the transaction. I would leave that to Bobby Nalzaro who has been harping on the issue in his columns and commentaries for days now. Commissions, even if they run to millions of pesos, are difficult to expose simply because those involved have the ability of cats.



The past days, there has been this odor emanating from somewhere in our kitchen. Which reminded me of my lola, Nanay Bunding (may her soul rest in peace), who used to punish our cat each time it leaves its excreta inside our house. Nay Bunding it was who told us city-bred kids about the special talent of cats: hiding the evidence of the crime.

Both the giver and the receiver of commissions (or in the terminology of the corrupt, SOP) are legally liable for the act, thus the tendency to clam up. In the end, what is left for the public to pick up from the crime scene are rumors and hearsay evidence, which is akin to the smell emanating from well-hidden cat excreta.

What caught my interest in Capitol’s tirade against the City Hall-Filinvest “joint venture” is the project’s development thrust, the same point I raised when the agreement was not yet signed. (The phrase joint venture is in quotation mark because there is logic in the contention that the agreement sounds more like a sale, with Filinvest given the sole authority to decide on what to do with the lots.)

Section 1 (b) of the agreement partly states that, “Filinvest and Cebu City shall jointly develop the Joint Development Properties into an integrated and well-planned clusters of medium rise residential buildings and retirement and congregate care complexes with adequate and necessary public infrastructure that includes roads, public utility networks and sewage system.”

After all the hassles the city and its residents have gone through in constructing this prime piece of property, including the diversion of money intended for basic services to the payment of the SRP loan, and we get only this: another subdivision area? No wonder a Japanese consultant chided the Filinvest project as having “low potentials for job generation.”

Why the haste in inking the deal with Filinvest when the city could have put the SRP to a better use (as an industrial or commercial site) had it waited for better deals later? Selling the SRP to the SM group, for example, would have been much better considering its expertise in developing sites for commerce. Turning a big chunk of the SRP into a subdivision is to kill the land’s potentials, making the area moribund.

Mayor Osmeña boasted often that the SRP is his baby. It now looks like the welfare of this baby is of lesser concern to the father than his own interest.

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