The Ayala-SM fight over Negros prime land

Ayala Land and SM Prime Holdings are fighting over a parcel of land owned by the Negros Occidental provincial government and which was subjected recently to a public bidding. What happened?

The bidding was declared a failure by the bids and awards committee chaired by Gov. Alfredo Maranon because the two bidders, Ayala and SM, both submitted bids below the appraised value.

SM offered P18,888/sq m for the entire 36,687 sq m sale component and P65/sq m for the lease component. Ayala bidded P23,626/sq m but only for a reduced area of 27,440.25/sq m, or effectively only P17,719.50/sq m for the sale component and P50/sq m for the lease component. The property has a floor price of P19,500 per sq m, according to the bidding committee.

After declaring a failure of bidding, the committee called for a negotiated sale placing Ayala and SM on equal footing. However, both were required to declare that no legal action would be initiated against the committee, which SM refused to accept.

SM maintained that it won the July 7 bidding as the floor price was never mentioned before and during the bidding and its bid was still compliant with Commission on Audit rules that allow a variance of not more than 10 percent between the floor price and the bid. SM’s bid was only 3 percent below the floor price.

Nevertheless, the provincial government proceeded with the negotiated sale and awarded it to Ayala last week, notwithstanding the pending petition filed by SM. The petition for injunction will be heard on Thursday, July 21.

Whatever will be the outcome of this controversy, the provincial government should clear itself of any speculations that the bidding process was manipulated to favor one particular bidder. It would also be favorable for Ayala, whose good image built over the years, is at stake. It is also unfair that Ayala should be dragged into this controversy, but even more unfair for SM, if it is indeed the rightful winner in the bidding.

* * *

The 41 former officials that the Philippine Amusement and Gaming Corp. (Pagcor) has sued is probably the biggest number of people charged with plunder in a single case. By the sheer number of respondents, a few could be described as “collateral damage.” A big net was cast by Pagcor and it is now up to the Department of Justice to determine whether all 41 can be justifiably charged in court. Lawyers say the DoJ should ask the following questions:

1. If there was a conspiracy to siphon money from Pagcor, how can 41 people of diverse backgrounds logically move in harmony over six years?

2. Assuming, for the sake of argument, that supporting the party-list organization was the real motive, how come the same was not used in the elections of 2004 and 2007? Why only in 2010?

3. Is it logical to believe that the 41 accused would all agree to commit illegal acts for the sake of Genuino’s children?

* * *

The Philippine government expropriated Naia Terminal 3 more than a year ago because the original Build-Operate-Transfer (BOT) proponent, Piatco/Fraport, allegedly constructed a “structurally defective” facility. So why is the government hiring the same Japanese contractor, Takenaka, which did the project, to complete the terminal? I mean if Naia 3 is really structurally defective, why hire the same firm that constructed it? Isn’t this an admission that Takenaka is a good contractor and that Terminal 3 is not structurally defective? Unless this is a repair job and Takenaka is simply being asked to finish it.

But what is this report that the Manila International Airport Authority and the Department of Transportation and Communications pay the contractor a whopping P500 million to “finish the job”?

Consider this: the Piatco/Fraport consortium financed and built the terminal under a 25-year BOT contract under the strict supervision of the MIAA and DOTC. It delivered the facility and was adjudged by international arbitration courts as a “builder in good faith.” In fact, under the expropriation ruling of the Supreme Court in 2004, the government was ordered to pay “just compensation” for which it initially forked over P3 billion, the balance to be paid on the basis of the findings of a three-man panel it created precisely to determine how much is the “replacement cost” for such a facility under the “just compensation” rule. If Terminal 3 was truly defective, why did the government expropriate it? How was the MIAA able to operate it since July 2008? Why are so many private investors interested in acquiring it?

* * *

The revelations of former ARMM Gov. Zaldy Ampatuan and Maguindanao Comelec officer Lintang Bedol about massive cheating in the province has given Aquilino Pimentel III new ammunition against Sen. Miguel Zubiri, against whom he has filed an election protest.

Zubiri was proclaimed winner over Pimentel in the senatorial elections of 2007. The Comelec credited Zubiri with 194,000 votes from Maguindanao. The inclusion of those allegedly fake votes gave Zubiri a lead of something like 18,000 votes over Pimentel.

Pimentel protested. After producing documentary and testimonial evidence, Pimentel as of today has a lead over Zubiri of some 257,000 votes.

Last week, Ampatuan and Bedol revealed the poll cheating in Maguindanao in 2007. And they admitted that they both acted in concert to falsify the results of the elections in Maguindanao to favor, among other administration candidates, Zubiri.

“Ampatuan and Bedol appear to be the chief implementors of the cheating operations in Maguindanao that undermined Koko and other opposition candidates,” former Sen. Aquilino Pimentel, Koko’s father, told the Kapihan sa QC last Saturday.