BCDA prepares legal action vs Sobrepeña firm

The Bases Conversion and Development Authority is preparing legal action against the Sobrepeña-led Camp John Hay Development Corp. (CJHDevco), whose unpaid rentals for Camp John Hay in Baguio City have ballooned to P381.8 million.

“We’re not going to say what [specifically we’re preparing to do] as we don’t want to preempt it, but we’ll be taking action soon,” BCDA chairman Felicito Payumo said in a briefing Monday.

BCDA president and chief executive Arnel Paciano Casanova pointed out that their action would be more drastic than just the issuance of letters demanding that CJDevco settle its arrears.

“If we take action, it should be more effective than demand letters, which they don’t take notice of anyway. So we’re not going to do just that anymore,” Casanova said.

According to BCDA records, CJHDevco’s unpaid rentals have reached P381.8 million, covering almost two years from December 2009 to June 2011.

The amount was on top of the P2.4 billion that the Sobrepeña-led company owed BCDA and was covered by a restructuring memorandum of agreement (RMOA) signed in 2008 for the lease of 247 hectares of property in the John Hay special economic zone.

BCDA vice president for business development and operations Dean Santiago said the state firm has repeatedly sent demand letters to CJHDevco when the latter’s unpaid rentals, worth P272 million, fell due last March 30.

The Baguio City government, which was entitled to a 25-percent share in the lease payments, likewise sent reminder letters to CJHDevco.

These letters, however, were “snubbed” and left unanswered, Santiago said.

Santiago said CJHDevco has repeatedly tried to avoid settling its financial obligations to the BCDA, even outrightly denying that it owed the state firm anything.

CJHDevco, however, effectively admitted its indebtedness by signing the RMOA in 2008, Santiago said.

The original lease contract for the John Hay property was signed by BCDA and CJHDevco in October 1996, but was revised in July 2000, July 2003 and again in July 2008. The last revision stated that the Sobrepeña-led company would pay its outstanding debts of close to P2.7 billion, representing unpaid lease rentals and interest charges.

The total arrears were trimmed down to just P2.4 billion, following CJHDevco’s payment of P100 million upon the signing of the RMOA and P180.3 million worth of assets in a “dacion en pago” (payment-in-kind) transaction.