CJHDevco’s offer violates bidding laws – BCDA
Posted: July 12, 2012 | Category: Freeport And Ecozones
The Bases Conversion and Development Authority (BCDA) dismissed as lies the claim of Camp John Hay Development Corporation (CJHDevco) that BCDA has blocked its proposals which promises higher revenues for BCDA.
“They said they offered to pay government P8.5 billion? That’s a complete lie,” BCDA President and CEO Arnel Paciano D. Casanova said, adding that BCDA never received such upfront offer to pay the said amount.
The offer of CJHDevco, which came a day before BCDA’s termination of the Lease Agreement, did not address the question of its P3Billion arrears to the government and sought to drastically change the terms of the bidded out contract—an act which has been declared illegal by the Supreme Court in 2003.
“What CJHDevco conveniently forgot to reveal to the public was that its offer was to write off its P3 billion debt to the Filipino people, increase the term of the original 25 year contract to 65 years and change the contract from a lease to a joint venture agreement,” Casanova added.
“The BCDA Board, as stewards of public property, exercised extraordinary diligence in rejecting such ridiculous proposal and unanimously voted to refuse the offer since it seeks to drastically change the awarded contract and violates the laws on public bidding. The BCDA Board has no choice but to reject such patently illegal offer,” Casanova said.
It will be recalled that in 2003, in the case of Agan Jr. vs. PIATCO, the Supreme Court ruled that in a publicly bidded contract, each bidder must bid on the same thing. The Court said that “[i]f the winning bidder is allowed to later include or modify certain provisions in the contract awarded such that the contract is altered in any material respect, then the essence of fair competition in the public bidding is destroyed.”
In the said case, the Court underscored that “[a] public bidding would indeed be a farce if after the contract is awarded, the winning bidder may modify the contract and include provisions which are favorable to it that were not previously made available to the other bidders."
Casanova dismissed as misleading the claim of a CJHDevco lawyer that BCDA would have received P8.5 billion if it accepted the CJHDevco offer without mentioning that such amount is only a projection and will be realized only in 2061 based on their proposal assuming all business conditions are ideal.
“Based on BCDA’s 15-year collection experience with them, CJHDevco has not been able to substantially deliver on its promised financial obligations under a simple lease contract. How much different would this be if it becomes the government’s joint-venture partner, when BCDA would be subjected to share even in their losses? It is disingenuous for them to state that they have proposed to pay BCDA P8.5 billion when they refused to pay the P3 billion arrears or even the P736 million bond that the RTC Baguio has ordered them to post.” Casanova pointed out.
Records will show that starting 1999, CJHDevco has used various reasons imaginable from the El Nino/La Nina, the escape of Fathur Rohman Al-Ghozi, 1997 Asian financial crisis to other local and global threats of terrorism in order to seek deferment of payment or restructuring of their past due lease rentals, which has now reached over P3 billion. In those years that it sought restructuring and deferment of hundreds of millions of pesos in rental payment, CJHDevco declared dividends to their shareholders instead of paying the government.
CJHDevco is attempting to put blame on BCDA by implying that the latter has refused their sincere offers without addressing the fact that their proposal is marred by their own history of defaults and misrepresentations, Casanova added.
The lease contract, forged in 1996, had already undergone one deferment of payment (1999) and three restructurings (2000, 2003 and 2008) to accommodate CJHDevco’s alleged financial constraints.
On 15 May 2012, BCDA terminated the said contract citing “material and incurable breaches” committed by CJHDevco in its contractual obligations. CJHDevco’s breaches include: failure to pay the annual rent due government for many years; double-sale of a property given as payment to BCDA; violation of fire and safety laws in the Camp John Hay Suites; unlawful squatting of CJHDevco’s security agency; subcontracting of the water operations and distribution without BCDA’s consent; violations on safety, health and environmental regulations; and concealment and misrepresentation of CJHDevco’s true state of finances to avoid payment of financial obligations.