Camp John Hay owes BCDA P3B

Early this month, I wrote a column on the controversy between the Bases Conversion and Development Authority (BCDA) and the Sobrepeña-led Camp John Hay Development Corp. (CJHDevco), leaseholders of the former American vacation camp. CJHDevco has wracked up an astounding P3-billion debt with the BCDA, which it refuses to pay. I was informed that the BCDA, as owners of the camp, was preparing to take over the camp by force, like it tried to do much earlier to the Poro Point Management Corp. In fact, scores of private security guards were spotted gathered at a nearby hotel supposedly ready for the forced takeover. The BCDA later said they were there for a training seminar.

I got two letters reacting to that column, one from BCDA chair Felicito Payumo and the other from BCDA president and CEO Arnel Casanova.

Payumo denied any involvement in the alleged takeover attempt of Poro Point as he “only inherited the problem.” He denied that there was an attempt to take over Poro Point by force. When I told him that I had eyewitnesses to the incident, he finally admitted that there was some “pushing and shoving” between the two sides but “that was all.”

On the problem with CJHDevco, Payumo said the revocation of the tax privileges of Camp John Hay as a result of a Supreme Court ruling was, “admittedly, a valid issue in the past, but the incentives have since been restored by Congress and should now be a non-issue, especially since a deferment and three restructurings had been granted CJHDevco for whatever delay they have incurred. The last Restructured Memorandum of Agreement (RMOA), signed by BCDA and CJHDevco on July 1, 2008, clearly acknowledged the P3 billion obligations of CJHDevco.”

The One Stop Action Center (OSAC), Payumo continued, has been used as a convenient excuse by CJHDevco to evade payment of its obligations. “My question is: If it is true that OSAC has not been operational, then why is Ayala Land not complaining about any delays in their applications for permit? And I am talking not about Global City, but of their development in Camp John Hay. Ayala has already completed seven projects, including two major buildings… The OSAC could not have done all these if it had not been operational.”

On the cutting and balling of pine trees, Payumo admitted that OSAC has no delegated authority from the Department of Environment and Natural Resources, especially after Executive Order 23 declared a moratorium on tree-cutting and earth-balling.

“The stance of CJHDevco not to pay is clearly unreasonable,” Payumo concluded. “The victims here are not some private parties but the Filipino people and the City of Baguio which is deprived of its rightful share.”

For his part, Casanova said it was “impossible” for him to participate in the 2006 Poro Point takeover “because I could not have been physically present at Poro Point. I was already in Cambridge, Massachusetts at the time, taking my master’s degree in Harvard University.”

Casanova said he took exactly the opposite view in a legal opinion as early as 2004, “stating that a takeover could not be justified and (I) asserted that the BCDA should honor an existing and valid contract. For the stand I took and for resisting political pressure to reverse my position, I was baselessly charged and harassed with a plunder case before the Ombudsman, which was eventually dismissed for lack of merit.”

Casanova added that “it is wrong to compare the alleged Poro Point incident to the CJHDevco case of non-payment, “because in the Poro Point case, the private sector partner was never in breach of their contract and has religiously paid its obligations…. In contrast, the CJHDevco has consistently failed to meet its contractual obligations to the government, but we want to be consistent in our position that contracts should be honored…. CJHDevco has continuously defaulted in its obligations despite all the three restructurings that have been given to them. We shall therefore observe the same resolve in enforcing the legal rights of the government in the same manner that we have upheld the rights of the private sector partner in Poro Point. Simply, the contrasting case of Poro Point is a case of a faithful business partner as against a defaulting and an evasive one such as Sobrepeña’s CJHDevco.”

Casanova also denied that “Baguio City could be the biggest collateral damage” from the so-called high-risk moves. “On the contrary,” Casanova said, “we are acting for the interests of the citizens of Baguio and the neighboring municipalities of the Cordilleras to collect so they can benefit from the P750-million share that they should be receiving. This huge amount could be used to deliver basic services in the midst of environmental disasters that have plagued the city, such as the trash landslide in Barangay Irisan that killed a number of persons. We are acting as stewards of the people, and we believe that Mayor [Mauricio] Domogan and any service-minded politician share the same view. We know for a fact that Mayor Domogan and all the public leaders in the Cordilleras would support the collection of this amount. The non-collection of the P750-million share of Baguio City and other municipalities is not only a collateral damage but a disaster for the city.”

Casanova concluded: “It is regrettable that this firm that owes P3 billion from the State—and therefore our people—has unleashed tricks to avoid paying a debt that the firm itself acknowledged…”

We should also ask: “Is the CJHDevco complying in good faith with its contractual obligations, not only with the BCDA, but with the buying public? Are its business practices transparent, ethical and in compliance with our laws?”