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Clarifications on Banal column from developer of GGLC project

/ 03:50 AM September 19, 2014

This refers to the column of Conrado Banal titled “Land of the plea” (“Breaktime,” Business, 9/15/14), where he wrote about the Sabah Al-Ahmad Global Gateway Logistics City (GGLC) project and the ongoing dispute between the project owner Global Gateway Development Corp. (GGDC) and its terminated contractor Peregrine Development International Inc. (Peregrine). We find it necessary to clarify certain statements in the column.

Peregrine is correct in saying that it paid $20,000 in 2006 to Clark Development Corp. (CDC). What the column conveniently omits is that the money was paid under an agreement between Peregrine and CDC whereby Peregrine was obligated to provide the wherewithal to develop the Industrial Estate-5 (IE-5) site prior to being awarded the right to lease it—a precondition that it was unable to meet. As a result, the agreement expired without Peregrine being awarded any right to lease or develop the IE-5 site (now known as GGLC). This can be checked easily and directly with CDC.

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Much time has passed from the time Peregrine signed its (now expired) agreement with CDC until the time GGDC looked at the project that the day-to-day management of the

IE-5 site had transferred from CDC to Clark International Airport Corp. (CIAC). When GGDC signed an initial 50-year lease agreement with CIAC (and made an initial payment of

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$4 million, as compared to the $20,000 from Peregrine), they were the only parties involved. Peregrine was not, and is not, a party to the lease agreement. This may also be easily verified with CIAC.

As for the concept of the GGLC, GGDC does not take credit for it, nor should Peregrine. Credit should go to the Philippine government and to some very talented and adept Filipino urban planning professionals in Manila. In fact, the concept of a logistics city at IE-5 was actually born out of a comprehensive master plan for the Clark Freeport Zone commissioned by the Philippine government. After signing the lease agreement with CIAC, it was GGDC (not Peregrine) that, sometime between 2009 and 2010, paid Palafox and Associates for the original site-specific GGLC master plan, and it was GGDC (not Peregrine) that in 2012 paid Environs Systems Group Inc. (a Philippine-owned and -operated firm) for an urban planning update to the master plan.

To further clarify, GGDC and Peregrine have never been partners. Peregrine does not, and never has had, any ownership in GGDC or the GGLC project. Peregrine was merely a contractor hired by GGDC to do work and manage work on the GGLC site. It was GGDC that terminated Peregrine last April 14 and, in accordance with their contract, filed for arbitration last May 25 in Singapore inclusive of claims that it had against Peregrine. Only after GGDC filed for arbitration in Singapore did Peregrine file an action with the Angeles City Regional Trial Court last June 10. And while Peregrine may not give much credence to the favorable ruling for GGDC issued last Aug. 12 by the Court of Appeals in the form of a temporary restraining order, the RTC judge certainly did when he said the cases filed by Peregrine in the RTC would “be sent to the ARCHIVES pending the outcome/resolution of the Petition for Certiorari filed by … GGDC before the Honorable Court of Appeals…” (emphasis on ARCHIVES by the

RTC judge).

When GGDC signed its lease agreement with CIAC, it paid $4 million up front and originally committed to spend $100 million in 25 years on

developing the site—a lot of money at the time for a piece of land made up of farms, fishponds and the like, and for which there was little commercial interest. GGDC met its $100-million commitment in only six years; furthermore, it is prepared to spend $150 million+ by the end of 2015 to build five planned platinum-certified LEED buildings with over 140,000 square meters of ground floor area (there is only one platinum-certified LEED building in Manila today).

Today GGLC has 30 hectares of fully developed lot inventory that can

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accommodate over 1 million sqm of office space (or every office building that has been built in greater Manila in the last two years). And GGDC will spend over $3 billion to fully develop the GGLC, which will result in over 300,000 jobs, over 5.8 million sqm of floor space under roof, and an annual payroll of 600 million—if only GGDC would be allowed to move forward, unhindered in its development of the GGLC site.

GGDC is going through the dispute resolution process with Peregrine, abiding by all applicable Philippine laws, rules and regulations. We are confident we will prevail in the end.

—MARK WILLIAMS, president,

Global Gateway Development Corp.

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