Purchase of SRP lotS: FLI to rescind deal with city

CEBU, Philippines - Mayor Tomas Osmeña had disclosed that Filinvest Land Inc. will rescind the contract it signed with the city government to purchase 19.2 hectares of land at the South Road Properties.

Osmeña told The Freeman the company’s Senior Vice President for Visayas and Mindanao, Tristan Las Marias, will announce the move formally during a press conference at City Hall at 11 a.m. today.

The contract was signed during the time of former mayor Michael Rama.

Osmeña said he welcomes the decision of FLI, as this means the city no longer needs to file a case in court to have the contract revoked, as well as the contract with SM-Ayala Consortium for the purchase of 26 hectares of land, also at SRP.

Osmeña said the FLI officials decided to rescind the contract because the city, during the administration of then mayor Michael Rama, failed to comply with the terms and conditions of the sale.

Osmeña did not elaborate on the development further during the interview with The Freeman yesterday but said he will answer questions in today’s press conference.

The mayor said that when the city signed the deed of sale, it was agreed that City Hall will turn over documents like titles of the property within six months after the signing and after FLI and the SM-Ayala Consortium paid the initial half of the purchase amount.

The city reportedly failed to honor this agreement despite having already received P8.3 billion, which is equivalent to half of the total amount of purchase cost.

The remaining balance of the sale is agreed to be paid on a staggered basis within the next three years.

Osmeña said the sale, which was conducted through a public bidding, was highly questionable, which was why he was planning to bring the matter to court to have the contract revoked.

The mayor said the sale was anomalous because there was alleged monopoly during the bidding with the developers allegedly agreeing on what property to buy. He even accused Rama of conniving with developers.

Rama argued, “How can I be conniving when the sale is open bidding?”

The city, when Rama was still mayor, sold the property at P38,000 per square meter or P16.76 billion for 45 hectares of lot. Filinvest wanted to use 70 percent of the property for commercial and office use and use the rest for residential purposes.

When Osmeña assumed office on June 30 last year, he ordered the city treasurer and the budget officer to refrain from spending the amount derived from the sale of the lots, saying he will return the money to the buyers.

FLI’s earlier plan was to showcase an integrated, mixed-use, master planned and sustainable community, taking advantage of the property's unique features and capitalize on key strengths in the areas of retail, entertainment, hotel, office and residential uses. — /JMO (FREEMAN)