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Cebu News

“A result of corruption”: Tom to void sales at SRP

Jean Marvette A. Demecillo - The Freeman

CEBU, Philippines - When he sits as the mayor of the City of Cebu, mayor-elect Tomas Osmeña said he will rescind the sale of the 45.2-hectare lot at the South Road Properties to three giant developers.

"As soon as I become the mayor, I'm going to formally oppose the sale of the SRP lots to Ayala, SM and Filinvest. Among other things I believe it is highly dubious if not outright corrupt," he told reporters in a press conference in his house in Barangay Guadalupe.

Osmeña said he can detect "corruption" with a formula — monopoly plus discretion minus transparency equals corruption.

"One, monopoly; there's a monopoly in this case kay nagsabot sila ang bidder kada property. Second, discretion; the bidder can dictate what amount, what exact location, etcetera and third; there's lack of transparency they amend the ordinance and the resolution," he said.

Osmeña said he will oppose the lot sale worth P16.7 billion by asking the Commission on Elections to schedule a referendum covering the 630,003 voting population of the city on this issue.

"So, I will put all the cards on the table, so that there is maximum transparency so that I will give enough time for the people to understand what are the pros and cons and on how they arrived at this. And then they vote. I'm giving it to the people. I'm giving the government back to the people," he said, saying the SRP belongs to the people Cebu City.

Last year, the city government declared the consortium of Ayala Land, Cebu Holdings Inc. and SM Prime Holdings as the highest bidder with P10.009 billion for a 26.3-hectare property, while Filinvest Land Inc. was the highest bidder with P6.7 billion for a 19.2-hectare property.

These giant companies have already paid P8.35 billion to the city government as down payment of the transaction last year.

Osmeña said the down payment of the giant companies is not an important discussion at this point in time.

"That's not an important discussion at this point in time because we can always work it out in such way because I think there's no more cash in the city. If we remove the P8 billion we're bankrupt. I don't know we'll see that position later on. I will work that out," he said.

He said the consortium was technically legal, but it is detestable, saying it is not just a 200-square-meter property, but a P16.7-billion lot.

"We are talking about transaction involving P16 billion and I think the people should have a say because I'm accusing all of them, including (Mayor Michael) Rama of connivance in pushing this through," he said.

He admitted the matter will take a long time to settle especially in court.

Osmeña acknowledged the fact that he cannot "realistically" fight the giant developers, saying they can hire several lawyers, but he said he will just let the people vote so that he can show the Supreme Court the decision of the people.

When asked if he will file to revoke the sale, he said he will let the lawyers figure it out, but he said he does not have to rush this referendum because it is very complicated.

When sought for comment, Comelec-7 Director Jose Nick Mendros said it depends on the issue. Mendros said under the Local Government Code, there is what they call an initiative and a referendum.

"Sa initiative, it's the people that propose a legislation. Sa referendum, meron nang draft na proposed legislation na parang i-submit to the people by voting. Kon mero'ng ganyan, Comelec will conduct. Meron ng draft legislation, they can submit to the people for approval for a referendum," he said.

Corporate Communications manager Jeanette Japzon of Ayala Land, an affiliate of Cebu Holdings Inc., declined to issue a statement until the city government formalizes its stand on the issue.

"We have no direct information on the matter and we cannot comment as of this time," she said.

The FREEMAN emailed the office of SM vice president for investor relations for comments, but there was no response yet as of last night.

Osmeña said he will not meet with the management of the giant properties to discuss the issue.

"I don't even want to meet them because I'm not for sale," he said.

Meanwhile, Rama said he will meet his Team Rama Councilors on the matter.

"How can I be conniving when it was a public bidding?  He just wants to do something again," Rama said.

In his opposition, Osmeña said he will still "work" with the remaining funds at City Hall, which he said is the SRP money.

"I will work that out. We are bankrupt anyway. We are bankrupt the way it is right now. People don't know," he said.

To address this, he said he is eyeing to sell the 1.5-hectare property at Pond F of SRP, near the property of FLI, adding that he will also let the people know the market value of the SRP lot today.

"I am just trying to bridge the gap. So that we can go back on track and put everything, put our house back together again. In this particular case, we are raising it strictly for revenues. It's very small," he said, adding that selling the 1.5 hectare property is "an emergency measure just to bridge the internal needs."

When asked how he will deal with the Team Rama-dominated City council, he said he will let them vote on the issue.

"We'll let them vote against it. But at least I'm going to explain it to the people of Cebu," he said.

When asked if he will also oppose the prepayment of the SRP loan, Osmeña said it is not urgent for him considering that there is no demand letter from the borrower.

Rama has been vocal about his plan to wipe out the P2.6 billion outstanding balance of the SRP loan to avoid foreign exchange rate loss that the city will incur, but his plan has been consistently blocked by the BOPK-dominated city council.

In 1996, the city incurred the Y12.3 billion loan or about P2.83 billion. The city already paid more or less P5.6 billion to its lender already. The remaining P2.6 billion balance is due in 2025 yet.

Osmeña said he can pay the SRP loan even without selling lots of SRP.

"I have no objection in paying the utang. Although, It's not urgent to me because we are only paying 5.7 interest per year. And the property values are going up by 100 percent per year. So, why are you selling properties double value every year to save 5.7 interest per year? Don't you see you're being misled?" he said.

He said that before, SM bought the 30-hectare lot where the mall is located at P10,000 per square meter. Before the opening of the mall, he said it was P38,000 per square meter. He said he cannot understand selling over 40 hectares lot to pay the P2 billion loan.

"This is the kind of mess that we have gotten into. Nagsabot sila. I don't mind fighting SM or Ayala. I don't mind," he said.  — with Carlo S. Lorenciana and Ehda M. Dagooc/BRP (FREEMAN)

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