Trade and Industry Secretary Ramon Lopez better get a certified auditor fast before the next congressional hearing on the questionable P1000/year lease of the agency’s five-hectare property along Roxas Boulevard.
Entered into in 1996 with Philexport, a private exporters association, parts of the leased property have since been used by the association, the DTI and an attached agency, Export Development Council (EDC), for export promotion and development activities. The bigger portion was sublet—or was it injected?—into a joint venture operation with the ICCP Group owned by businessman Guilly Luchengco.
Up to now, the manner by which this property was eventually developed remains a mystery. That traceback will now have to be explained by Secretary Lopez and his certified auditor as the government auditing agency, COA, has red-flagged many of the transactions on this property since it was first turned over to Philexport and its partner, ICCP group.
Records culled from the first congressional hearing show that the property was originally turned over to Philexport which in turn entered into a venture with the ICCP Group to develop the property. How much did they value the property and what was the planned development—these are questions Secretary Lopez has to explain especially since he has been quoted as having said that the original terms of the agreement have been followed. “The original intent is in order, backed up and legal by law..”
That said, Secretary Lopez will now have to produce the original agreement and what terms and conditions were actually followed. Is he talking about the one thousand a year lease which translates into a total of P22,000 from the time this was turned over in 1996 to the present? If that is the case he should be told that the private sector partners, Philexport and ICCP group, has really brought the government to the cleaners. He should be reminded that at the time of the lease the minimum per square meter selling price of land within the same area was already no less than P15,000.
In fact, some of my friends in the real estate business tell me that had they know the property was turned over and possibly injected into a venture corporation with Philexport and ICCP they should have bid themselves and gave government better terms.
But of course, Secretary Lopez has another way of computing the returns on this government property. He claims that just over the past 19 years government actually got P300-million contributions from the agency’s private partners for export promotion and development. That figure will still have to be validated as well. That is after Secretary Lopez explains the Byzantine manner by which Philexport and ICCP group got hold of the property and made all kinds of revenue generating developments in the area.
One need not be a rocket scientist to know that this P300 million worth of contribution is such a ridiculous amount for a five-hectare prime property in that area. But if you allow yourself to contribute the said property with a ridiculous lease payment of P1000/year then you better be prepared to explain why. Secretary Lopez says the original agreement is proper and above board resulting in such payment after 19 years so he better sharpens his pencil and gets his auditor roasted. Even if he tries to cover his tracks with the proposition that anyway the private partners had put in millions of pesos as well into developments in the area.
One such development, according to Secretary Lopez, is the World Trade Center exhibition halls. Again, the provenance of this venture needs a proper explanation. Per Secretary Lopez, this structure owned by WTC which has been raking in millions of pesos a year in lease payments since its establishment is jointly owned by Philexport/ ICCP Group and the National Development Corp. (NDC) presumably with the ridiculously priced five hectares leased property as government contribution.
If this is an arrangement that Secretary Lopez is comfortable with then he better explain himself as well. Just a cursory read of the venture documents show that government was clearly “cleaned up” by Philexport and the ICCP Group on this venture.
But just to show that Secretary Lopez himself is not thoroughly convinced that the whole 1996 lease agreement was so lopsided and not really that advantageous to government he issued a kind of ‘excuse note’ saying that ANYWAY there is now another group—the Platinum Group—which submitted, in his mind, a better deal for part of the property. “Moving forward,“ Lopez said, “a new project with a new partner will be undertaken involving a hotel and an office tower which will generate more income for the government..”
That’s well and good, if true. The question is: where’s the new terms and conditions of this new deal? How is it different from the Philexport/ICCP deal? These and other questions on top of the unanswered ones from the 1996 deal will have to be answered properly and responsibly when the hearing resumes. The can of worms from this mysterious and decidedly disadvantageous arrangement has just been opened for further investigation.
Abangan.