Slammer capitalBy Conrado Banal
Philippine Daily Inquirer
Piles upon piles of court cases are plaguing the development of the 250-hectare Camp John Hay in the “summer capital” called Baguio City into a modern eco-friendly tourism and commercial complex.
Still there are no signs that the project, conceived way back in 1996, complete with a comprehensive master plan designed by experts hired by the government, can now proceed full blast some 18 years later under the Aquino (Part II) administration.
I am afraid that the biggest losers are going to be, simply, the millions of people of Baguio. How badly do they need the project? I think they may have use for the thousands of jobs to be created by the project, particularly those from the BPOs that the special economic zone is supposed to attract.
Baguio is the education hub of northern Luzon. As we all know, except perhaps the boys at the Palace, BPO and IT centers thrive when they are close to university towns. Thus, Baguio is the perfect fit for sunrise sectors like business process outsourcing and information technology.
Under the plan, the city government of Baguio gets about 25 percent of the rent that the government earns from the project. The city is not getting a single centavo at the moment, precisely because of the trouble besetting the project. No wonder, even Baguio City Mayor Mauricio Domogan is calling for the early resolution of the court cases so that the development project can continue.
But to me, if those cases are allowed to take their normal snail-pace course, the development project may be doomed to hit senility even before it can reach adulthood. How long do court cases last in this country, 10 or 20 or 30 years? The protagonists can always dribble the whole thing away to waste time.
Look, those legal tussles can be as silly as the “squatting” case filed by the BCDA, or the Bases Conversion Development Authority. This government outfit, charged with the serious mission to develop the former US military base, wants to kick out its own developer known as CJHDC, or Camp John Hay Development Corp., a company under the Fil-Estate group of Robert Sobrepeña.
For some reason, under the Aquino (Part II) administration, the BCDA suddenly wants to take over the project. Our leader Benigno Simeon (aka BS) relies on a new man as head of the BCDA, a lawyer named Arnel Casanova, who unabashedly proclaims himself as the “new breed of national heroes.” Under him, the BCDA is now trying to take back the project from CJHDC—forcibly, at that!
In no way, from the looks of it, can CJHDC hand over the project without a fight to Casanova and company, or to whoever powerful and influential is backing him up in the Aquino (Part II) administration.
You see, the company claims it has already invested some P5 billion in infrastructure on an 18-hectare property that, under the government-designed master plan, was allowed to touch—out of the total leased area of 250 hectares. The company has structures like hotel, housing and commercial area on 3.5 hectares of the 18-hectare property—or roughly only one-fifth of the development area under the master plan.
The private company also insists it has already paid the BCDA a total of P1.5 billion in rent over the years.
Now, the company blames the government, particularly the BCDA, for the slow progress in the development project, pointing out that the government failed to deliver on its part of the agreement, such as tax incentives and all the necessary permits, plus, more importantly, the land documents.
On the other hand, the BCDA demands that the company immediately pay the P3 billion in what Casanova and company consider as “back” rentals. The authority then filed several cases against CJHDC, including the “squatting” case and other inconsequential cases like “estafa.”
At the center of all the legalese screaming in court, plus all the hemming and hawing in media, is this not-too-simple question: How much should CJHDC pay the BCDA in rental?
To settle the issue once and for all, CJHDC filed an arbitration case, something that can force both sides to submit themselves to the decision of a knowledgeable referee like the Philippine Dispute Resolution Center Inc. (PDRCI).
The lease agreement between the company and the government, by the way, requires such an arbitration case to resolve disputes, instead of court cases.
The PDRCI has as members prominent lawyers, members of the judiciary, academicians, arbitrators, bankers and businessmen. It is a non-profit organization created by the business sector, precisely to encourage arbitration to settle business disputes. Experience shows that arbitration is much faster than court cases.
Even the mayor of Baguio is urging the BCDA to submit itself to arbitration. Earlier the city mayor was quoted in reports: “Instead of arbitrarily pushing for the collection of fees, the BCDA must submit itself to arbitration … as stipulated in the contract.”
Still, the BCDA under Casanova, the point man of our leader BS in the Camp John Hay development, shuns arbitration. In no time, the BCDA also manages to launch a media war against CJHDC, including expensive full-page advertisements in newspapers.
The BCDA insists that the private company must abandon the project immediately and, thus, leave all its billions of pesos in capital investments behind. The authority claims the developer owes it P3 billion in rent. It wants the developer to pay up right away or vacate the premises or go into the slammer.
And so CJHDC files an injunction case against the BCDA to prevent its takeover of the development project. My info is that the court already has a ruling in favor of CJHDC, and the company is also done with posting the required bond amounting to P740 million.
By the way, even the court uses terms like “unilateral takeover” and “improvident act” to describe the moves of the BCDA regarding the development project. In fact, the court has a standing order to the BCDA to refrain from awarding the development project to a “new” entity.
Still, whatever happens in those court cases, the development project continues to hang. From what I hear, the private developer is already willing to sit it out until 2016—or the end of the term of our leader BS. The only trouble is, well, Baguio misses the foreseen boom in tourism and BPO sectors.
The previous administrations (i.e. those under the man named Band … Wrist Band … and even the cute administration of Gloriaetta), have, in effect, admitted the failure of the government to deliver on its part of the development. They also have agreed to restructure the terms of the deal. In short, no court cases. You know—a political solution!
If the Aquino (Part II) administration truly wants the Baguio development project to fly, I am certain they know what to do. The thing is that nobody is doing it. Everything is left to the care of some new breed of national heroes.
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