NHA warned on deal to settle Smokey Mountain row

The government’s corporate lawyers have warned the state housing agency against a P1.1-billion settlement deal with businessman Reghis Romero II meant to settle a compensation dispute over the latter’s controversial redevelopment of Smokey Mountain in the 1990s.

In a letter to National Housing Authority General Manager Marcelino Escalada sent last week, chief government corporate counsel Elpidio Vega cautioned the agency about the “variance” between its own computation and the proposed settlement with R-II amounting to P1.12-billion plus five hectares of government property in Vitas, Tondo.

Vega said earlier computations presented by the housing agency’s accounting department to the NHA board indicated that it allegedly “overpaid” Romero’s R-II Builders by as much as P300 million.

“Given the manifest variance in the findings of NHA’s accounting department as well as [NHA] board resolutions [authorizing the settlement], such findings and resolutions have to be harmonized and justified for the benefit of both the NHA and its board,” the lawyer from the Office of the Government Corporate Counsel (OGCC) said.

Last Oct. 3, the NHA’s board passed a resolution to implement a revised P1.12-billion settlement with R-II Builders involving a 2011 Smokey Mountain housing case.

This settlement was supposed to be presented to the Court of Appeals, which mandated both parties  to explore the possibility of an amicable settlement.

But aside from citing the alleged variance in computation, Vega urged the NHA to defer its mediation with R-II, stressing that any possible settlement should involve proper computation of interest and proper valuation of the Vitas property.

He said the NHA board should consider OGCC’s position to apply the 6-percent legal interest versus the asserted 12 percent on NHA’s obligation to R-II, if any.

Finally, Vega said that  the OGCC advised NHA that any possible settlement “should be conditioned on the settlement of all … cases filed … against the NHA [by R-II Builders], and R-II’s waiver of any and all claims.”