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SM Land vs Ayala Land

/ 09:17 PM October 27, 2013

The rivalry between land developers SM Land and Ayala Land Inc. (ALI) is becoming bitter with Ayala emerging as the villain. The two billionaire giants have already tangled in the Ortigas land issue, the Bacolod land bidding case, and in the new SM Aura mall in Taguig where the Bases Conversion and Development Authority, said to be an ally of ALI, closed the street going to the newly opened SM Aura, which would compete with ALI’s Market Market in Bonifacio Global City. If ALI does not get what it wants, it could go to court and tie up the project in a lengthy court litigation. It seems ALI does not want to lose its reputation as “the biggest land developer” in the Philippines. Nobody is contesting that, but other developers plead: No foul tactics please.

The latest arena for the two land developers is the reclamation of 300 hectares of foreshore and offshore areas of Manila Bay, adjacent to SM’s Mall of Asia in Pasay City. SM Land submitted an unsolicited proposal to Pasay to reclaim the 300 ha. It will invest P54.5 billion in the project. It will give at least 51 percent, or 153 ha, of the reclaimed land to Pasay. SM offered to shoulder all costs, including the costs of all permits and clearances from government agencies, and the expenses to be entailed to comply with all the government and legal requirements.

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Pasay published the notice of unsolicited proposal and invitation for competing proposals to SM Land’s proposed joint venture in the newspapers three times (on Oct. 1, 8, and 15, 2013). The deadline set for interested parties to counter the unsolicited proposal was Nov. 4, 2013.

Enter ALI. In a letter to Pasay Mayor Antonio Calixto last Oct. 23, or barely 10 days before the deadline, it contested Pasay City’s Nov. 4 deadline. It said it learned about the notice last week, although it had already been published three times this month. Really?

In its letter, ALI not only confirmed its interest to submit a counterproposal but also questioned some of the requirements set by the city government, like the purpose of the required previous project of the bidder, the nature of the invited counterproposals, the nonrefundable bid document fee, etc.

Under the law, interested parties can submit counterproposals to an unsolicited bid. The original proponent can equal or surpass the counterproposal, after which the bidding ends and the project is given to the winning bidder.

It appears, however, that ALI raised these points only to get an extension for the submission of a counterproposal. In a press statement, ALI admitted that it needed more time to study the issues and prepare a competitive proposal. It said the Nov. 4 deadline was too short for them to develop a master plan, study its financial and environmental impact, and other excuses.

Obviously, ALI was buying time to get a deadline extension. In fact, a copy of the letter was given to two government agencies, the National Economic and Development Authority (Neda) and the Public-Private Partnership (PPP) Center. This can be likened to judicial “forum shopping” (which is illegal under the law), designed to stop or stall the project if ALI does not get what it wants from Pasay City, some observers say. Its next step may be to file a case in court, which would definitely delay the project. We don’t know if Neda and the PPP Center would interfere. If it does, that would confirm the buzz circulating in business circles that ALI is one of the highly favored companies under P-Noy’s administration.

ALI said in its letter to Mayor Calixto: “We are the Philippines’ leading real estate developer.”

No one is contesting that. ALI already has 5,692 ha in the pipeline for development, as big as Hacienda Luisita, probably the biggest among land developers. These include the Sta. Ana racetrack, Food Terminal Inc., Fort Bonifacio, Alabang Estate, Cebu Park, Nuvali in Laguna, and the “Plastic City” of Gatchalian in Bulacan. Recently, it opened its UP Town Center inside the UP campus on Katipunan Avenue. Its UP-Ayala Technohub has been operating also inside the UP campus in Quezon City. Nearby is its Trinoma shopping mall, directly competing with its neighbors, SM North Edsa and The Block.

It is also ejecting the squatters around Trinoma and neighboring areas to build more condos and office buildings. There is talk that it is behind the planned Quezon City Business Center along Quezon Avenue, North Avenue and Agham Road, because of which the Quezon City government has been trying to grab pieces of land in the area, such as the sites or portions of the Manila Seedling Bank Foundation, the National Children’s Hospital, the Veterans Memorial Medical Center and the Ninoy Aquino Park.

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Residents in the area are objecting to the planned business center as it would create

horrendous traffic jams that would imprison them in their homes.

People are asking: Why are ALI and City Hall lusting after the open spaces when there are the squatter colonies along Quezon Avenue and around the Bureau of Internal Revenue and Post Office buildings? ALI and City Hall would do the country a great service if they would clear these areas and develop them.

Nobody would contest them but would thank them if they did that.

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