City’s share from CJH rentals to be directly remitted

BAGUIO CITY  – Mayor Mauricio G. Domogan wants the city’s 25 percent share from the lease rentals of the 247-hectare John Hay Special Economic Zone (JHSEZ) to be directly remitted to the local government so that the city will not be caught in whatever future impasse that may occur between the contracting parties over the privatization of the said zone.

The local chief executive admitted there are ongoing negotiations between the State-owned Bases Conversion and Development Authority (BCDA) and the local government on how to come out with a possible solution to the impasse created by the previous ruling of the Makati-based Philippine Dispute Resolution Center that mutually restituted the contract between BCDA and the Camp John Hay Development Corporation for the development of the economic zone.

However, he declined to provide further details on the negotiations until such time a clear picture emerges on the decision of the BCDA on how to comply with the arbitral ruling that required the State corporation to pay to the developer the amount of P1.4 billion in paid accumulated lease rentals and for the developer to peacefully turnover to the BCDA the leased premises in tenantable condition.

“We do not want to suffer the consequences of being at the losing end of the deal like what had happened in the mutually restituted contract between BCDA and the developer that is why we will be pushing for the inclusion of a provision that will mandate the contracting parties to directly remit to the local government its 25 percent share from the lease rentals of the economic zone once there will be a new developer,” Domogan stressed.

Under the present set up, the developer fully pays to BCDA the annual lease rentals of the economic zone and the State corporation will in turn remit to the local government its 25 percent share from the lease rentals.

Currently, BCDA has yet to pay the developer the P1.4 billion reimbursement of its accumulated lease rentals that is why CJHDevCo continues to operate the facilities that were established within the various parts of the declared special economic zone.

Domogan admitted that the disadvantage of the current set up in the payment of the city’s share from the lease rentals was not seen when the agreement between BCDA and the developer was signed over two decades ago that is why now that the problem is evident, it is best to include a provision in the future contract with a new developer that the city’s share should be directly remitted by the developer to the coffers of the local government to avoid the same from being tied up to similar problems between the contracting parties in the future.

The grant of the city’s 25 percent share from the lease rentals of the declared special economic zone was part of the 19 conditions imposed by the local government for the development of the former American rest and recreation center as embodied under Resolution No. 362, series of 1994 that paved the way for the privatization of the economic zone that was supposed to be converted to a world-class multi-use tourism and watershed center.

By Dexter A. See

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