Military joins court battle vs SM over Fort Bonifacio land

MANILA, Philippines—The military and defense establishment  has joined the state-controlled Bases Conversion Development Authority in a legal battle against tycoon Henry Sy’s property unit SM Land over the privatization of a 33-hectare piece of prime property at the southern edge of the former Fort Bonifacio army camp.

The Department of National Defense and the Armed Forces of the Philippines filed at the Supreme Court on Thursday a petition to be allowed to intervene in an ongoing court case involving SM Land, which earlier managed to obtain from the Supreme Court a restraining order against the BCDA’s auction of the property.

The “intervenors” argued the need to prioritize the enhancement of the capability of the AFP as an institution to provide national security instead of SM Land’s commercial interests, noting that the AFP Modernization Program relied on the disposition of Metro Manila military camps for funds to modernize the Armed Forces.

The DND and AFP said they had a legal interest in this case and that their intervention was necessary. The petition noted that the AFP would stand to receive at least 50 percent from the proceeds of bidding for joint partnership in the development of a 33.1-hectare prime property in Fort Bonifacio known as the Bonifacio South Pointe.   As such, they asked the Supreme Court to lift a restraining order on the BCDA’s bidding out of this disputed property.

SM Land, which had earlier submitted an unsolicited proposal to develop this property, obtained last January 9 a temporary restraining order against BCDA’s auction of the development right over this property. SM Land sought recognition as an original project proponent, which meant that instead of a public bidding, the privatization of development rights must be subjected to a Swiss challenge, where other parties can submit an improved offer but SM Land can match the best alternative offer.

The petition from the DND and AFP, however, argued that “the exigency of the AFP modernization program cannot be overemphasized.” For the next five years alone, the petition noted that the AFP would need at least P15 billion per year to upgrade its capabilities and “provide the country with a minimum credible defense posture.”

“BCDA is offering the public-private partnership (PPP) for the development of the property subject of this controversy to open public bidding in order to realize the optimum value for the property, and correspondingly, maximize proceeds from the activity,” the petition said.

The petition argued that the BCDA was not bound to declare SM Land as original proponent, citing the BCDA’s findings that the SM group’s revised proposal was “prejudicial” to government interest “for it will not yield the best value for the government and that it will be better to allow fair, transparent and open market competition to dictate the best value considering the prime value of the property.”

As such, the DND and AFP asked the Supreme Court to admit its comment-in-intervention and direct SM Land to reply, if necessary. It also asked the high court to consider its comments in resolving the petition.

“The AFP Modernization Program entails the development and employment of certain capabilities that can address assessed threats. The objectives of the program include the development and transformation of the AFP into a multi-mission oriented force capable of effectively addressing internal and external security threats,” the petition said.

The Inquirer asked for the SM group’s side on this matter but no comments were issued as of late Friday afternoon.