By Macon Ramos-Araneta
The Cagayan Economic Zone Authority (CEZA) has canceled a 25-year license agreement with Foremost Cagayan Development and Leisure Corporation (FCDLC).
The agency’s evaluation showed the agreement is “grossly disadvantageous” to the government with the firm’s failure to comply with its obligations to deliver on its investment commitments.
CEZA Administrator and CEO Jaime R. Escano terminated the FCLDC license after three years.
In a letter to FCDLC president Chan Wa Fai dated September 30, Escano said: “We are constrained to terminate the License Agreement effective immediately on the ground that the same is grossly disadvantageous to CEZA.”
“Upon the conclusion of the audit and evaluation that was conducted on all licensees and registered enterprises engaged in interactive gaming activities, we found that Foremost Cagayan Development and Leisure Corporation (FCDLC) did not comply with its obligations under its License Agreement.”
Under the agreement, CEZA authorized FCDLC to establish and develop a smart city and industrial park, an international airport, generation and distribution facilities for power, water, or other public utilities, and residential complexes or township within the Cagayan Special Economic Zone and Free Port (CSEZFP).
This is all in connection with the development, operation, and conduct of interactive gaming facilities and land-based casino enterprises and facilities.
FCLDC was granted a 25-year license in 2019 to operate an online casino inside the freeport during the term of then-CEZA Administrator and CEO Secretary Raul Lambino.
As part of the agreement, FCDLC committed to invest $500 million or $33.333 million over the next 15 years to develop the various complexes.
Escano said FCDLC did not make a similar investment commitment and only warranted that “it has the financial capability to undertake the required investment commitment.”
CDLC, he said, has not proven to be financially capable to undertake the required investment commitment.
CEZA said the FCDLC did not fulfill its commitment to invest the millions it planned for development over the next 15 years. It noted that FCDLC only invested nearly P250 million in the last three years, while incurring losses during the same period.