BuCor lease may signal infighting among Rody allies

MANILA, Philippines - Is there a rift among President Duterte’s supposed allies at this early stage in his administration?

 Speaker Pantaleon Alvarez has filed a resolution in the House of Representatives that seeks to investigate an alleged disadvantageous land deal by a banana magnate-friend of Duterte with the Bureau of Corrections.

 “It is the duty of the (s)tate, in particular the (l)egislative (d)epartment, to investigate current practices, as shown by experience, which result into disadvantageous contracts, for the purpose of creating legislative remedies to curb such practices,” Alvarez wrote in Resolution 867.

 The Davao del Norte congressman was referring to the allegedly grossly disadvantageous 25-year lease contract of BuCor with the banana firm, Tagum Agricultural Development Co. (Tadeco) Inc. owned by the family of Davao del Norte Rep. Antonio Floirendo Jr.

 The government is supposed to be entitled to a profit-sharing agreement with Tadeco by virtue of the lease agreement.

 Floirendo – more popularly known by his nickname “Tonyboy” by his close friends – is the biggest campaign financier of Duterte. He donated a total of P75 million based on the former Davao City mayor’s expenditure report to the Commission on Elections.

 Alvarez filed the resolution directing the House committee on good government and accountability, headed by Surigao del Sur Rep. Johnny Pimentel, to look into the matter as well as the alleged ill-treatment of the workers in the Tadeco banana plantation.

Justice Secretary Vitaliano Aguirre II reportedly ordered a review of the BuCor-Tadeco contract following complaints that the company’s annual payments – both lease and profit sharing – were only a fraction of the prevailing market rate.

 Tadeco and BuCor have entered into a joint venture agreement allowing the private company to lease from BuCor its land located in the Davao Penal Colony for the former’s banana plantation.

 Alvarez earlier vowed to look into the veracity of reports about the lease agreement where the government would get a guaranteed payment of P26.5 million per year for using the Davao Penal Colony’s 5,308 hectares of land, or P5,000 per hectare.

 According to the Speaker, the contract provides that the BuCor shall receive profit shares with respect to the leased land where bananas are planted, the amount of which shall also automatically increase by 10 percent every five years.

  “While this arrangement, at first glance, may appear beneficial, an examination of the surrounding circumstances as well as the prevailing industry practices would show otherwise,” Alvarez observed.

 “The existing contract, while guaranteeing the BuCor a share of P26.54 million per year for 5,308.36 hectares, actually prejudices the same since the prevailing price of lease contracts in that area is P25,000 per hectare per year,” he noticed.

 He suspects the government “is prejudiced” by as much as P106 million every year.

 “The share of BuCor is only P1.35428 per box, in contrast to the price of bananas at ($)12 per box FOB (freight on board) to China, (through) Middle East, Japan, as well as other markets; given the present exchange rate of P50 for every US $1, the difference is P600 per box,” he said.

 In the resolution, Alvarez also asked the Pimentel committee to look into serious allegations that the workers in the banana plantation operated by Tadeco have been ill-treated and exploited.