Gov’t seen to lose P12B in Swiss challenge for Bonifacio South Pointe dev’t
SCREENGRAB from www.bcda.gov.ph
MANILA, Philippines—The Philippine government stands to lose as much as P12 billion if the state run Bases Conversion and Development Authority proceeds with the conduct of a Swiss challenge for the development of the 33.1-hectare Bonifacio South Pointe property in Taguig.
In a statement issued on Wednesday, BCDA president and chief executive officer Arnel P. Casanova explained that President Benigno Aquino III’s legal and economic teams were convinced that a competitive bidding would yield the best deal for government instead of conducting a Swiss challenge as ordered by the Third Division of the Supreme Court.
In a Swiss challenge, a form of public procurement, a government agency that has received an unsolicited bid for a public project or services may publish the bid and invite third parties to match or exceed the unsolicited proposal.
A Supreme Court ruling, which was released only last month, favored the petition of SM Land Inc., which had sought a Swiss challenge instead of a public bidding after it submitted an unsolicited offer to develop the Bonifacio South property. Malacañang, however, thumbed down the petition and opted to sell the property through an open competitive bidding process.
The property firm of the Sy family then filed a case, citing the BCDA for breaching their agreement to conduct a competitive challenge.
BCDA filed on Tuesday a motion for reconsideration before the Supreme Court, as it stressed that the offer of SM Land at P38,500 per square meter was barely half the current market value of the property.
According to the BCDA, the current zonal value of the Bonifacio South Pointe property is at P100,000 per sqm, while its present market value has been appraised conservatively to be about P78,000 per sqm.
The agency added that the latest transaction at the Bonifacio Global City near the Bonifacio South Pointe was already at P500,000 per sqm when the Government Service Insurance System (GSIS) sold a 1,600-sqm property in September.
“The losses emanating from a bidding with a floor pegged at more than P12 billion below current market values will be much more,” the BCDA said in its motion.
“Clearly, this is grossly disadvantageous to government. We are asking the Court en banc to reconsider. Not only does it have legal basis, but it is also the better option for reasons of public policy,” Casanova further said.
On Aug. 13, the high court issued a decision, which permanently stopped the BCDA from auctioning off the Bonifacio South Pointe property. It also ordered the state agency to push ahead with the Swiss challenge.
But in a dissenting opinion, Associate Justice Marvic Victor Leonen noted that “there would be no unjust enrichment on the part of BCDA or injustice on the part of SMLI if the competitive challenge is terminated. The BCDA has already offered to return the value of SMLI’s security plus interest and admitted its obligation to return it upon termination of the process.”
“Any advantage given to SMLI now, arising from ambiguous terms and erroneous interpretation of the joint venture guidelines may have unnecessary and undesirable effects. It is partiality in favor of one company that has deterred investors,” Leonen warned.
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