The Bases Conversion and Development Authority is challenging Camp John Hay Development Corp. (CJHDevco) to make public the escrow account that it allegedly opened in 2008, to assure the government agency of full payment of the lease for the 247-hectare Camp John Hay property in Baguio City.
In a statement issued Wednesday, BCDA vice president for business development and operations Dean Santiago said the opening of an escrow account was required under the security agreement between BCDA and CJHDevco, which was signed together with the restructuring memorandum of agreement (RMOA) on July 1, 2008.
While the security agreement had been in place for almost three years now, he said CJHDevco never opened an escrow account.
“What escrow account are they talking about? If they really opened one, BCDA is not a party to it. We do not know what it is for and how much the actual amount in the account is,” Santiago said.
“We challenge CJHDevco to make the account public, if they did open one, so that everyone would see if they have complied with the lease agreement or not. We want to examine the account and see how CJHDevco arrived at the amount deposited based on their so-called proportionate rentals corresponding to the developed areas in the John Hay Special Economic Zone,” Santiago added.
If such an account existed, as CJHDevco claimed, Santiago said BCDA should be made aware of the amount deposited, as well as allowed to draw from it. The required escrow account, after all, was supposed to serve as a guarantee of CJHDevco’s obligations to BCDA.
The security agreement required CJHDevco to deposit 50 percent of actual common usage service assessment collections upon signing.
The absence of the escrow account, Santiago said, was tantamount to a violation of the 2008 security agreement.
The unpaid lease rentals of the Sobrepeña-led CJHDevco for the Camp John Hay property had ballooned to more than P2.4 billion, representing lease payments from 1999 to June 30, 2008, when the lease contract for the property was last restructured.
CJHDevco incurred another P272 million in arrears from September 2009 to March 2011, representing unpaid current rentals.