The administration’s “Build, Build, Build” program has received a boost with the reported allocation by the Department of Budget and Management of P34.9 billion to the Departments of Public Works and Highways and Transportation for right-of-way (ROW) acquisitions this year.
These acquisitions are critical to the administration’s aspiration to have new and improved infrastructure projects in full construction swing or operational by the time President Duterte’s term ends in 2022.
For decades, ROW issues have been a pain in the neck in the construction of the country’s roads, airports, seaports and other facilities.
Disputes over the legality of ROW acquisitions and valuation of expropriated private property are common fare in infrastructure projects, whether government-initiated or undertaken in conjunction with private companies.
Although courts are prohibited by law from issuing temporary restraining orders or similar writs on government infrastructure projects, some judges, on the pretext of protecting the rights of allegedly aggrieved contractors, have done so to the detriment of the prompt completion of the projects.
In spite of strongly worded circulars from the Supreme Court to the lower courts to strictly comply with this law, some judges have managed to go around them through procedural manuevers that avoid the use of the words “restrained or enjoined” but produce the same effect.
The time-tested way to get this legal obstacle out of the way is for the lawyer of the winning contractor to come up with the right amount of arguments that would convince His Honor to set aside his order.
With regard to valuation, the usual bone of contention is how much the government should pay the property owner for the portion of his property that has been or is proposed to be taken over.
The rule of the thumb in expropriation cases is, payment should be based on the property’s fair market value (FMV), or the price at which one would sell his property to a willing buyer where neither party is compelled to sell or buy it, at the time of the taking.
This price is different from the “zonal valuation” that the Bureau of Internal Revenue uses to determine, for purposes of computing the capital gains tax in sales of real property, whether the selling price of a property in a certain locality that has been sold and is being registered by its buyer is fair or undervalued.
Under normal circumstances, the FMV can be arrived at by finding out the cost per square meter of properties that are adjacent to the property subject of expropriation at the time of its taking by the government.
But some property owners want more than the FMV before they agree to peacefully cede their property. They also want to be compensated for so-called lost opportunity costs or the anticipated increase in the value of their land due to expected improvements in their area after several years.
If the owner stands pat on his demand for a price higher than FMV, the government would be obliged to commence expropriation proceedings in court which could take months, if not years, to finish depending on the temperament of the judge; or if a private company is involved, the latter may have no choice but agree to the additional costs to avoid delay in the completion of the project.
The problem becomes more complicated if the property is privately owned but the owner is nowhere to be found and the land is occupied by informal settlers, or its owners have passed away and their heirs cannot agree on the partition of the property among themselves, or there are several claimants to the property and its ownership is under litigation.
While there are legal ways to resolve these issues, their resolution often takes time and, in the meantime, the project is put on hold or work slows down to await the resolution of the problem.
With P34.9 billion to play around with, the government is in a good position to promptly settle compensation claims over ROW issues. After all, as the saying goes, money talks, and ROW issues are, at the end of the day, all about that.