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MANILA, Philippines - The Aquino administration has rejected the debt settlement plan of Sobrepena-led Camp John Hay Development Corp. (CJHDevco) because the proposed lease payment is grossly disadvantageous to the government.
During a special board meeting held May 15, state-run Bases Conversion and Development Authority (BCDA) unanimously rejected the proposal of CJHDevco since it doesn't show how the P3 billion in arrears will be settled.
CJHDevco's plan also aims to change the bid terms and extend its contract until 2061.
“This is in violation of the original lease agreement," Arnel Casanova, BCDA president and chief executive said in a statement.
“The extension they are asking is contrary to law. Other conditions they are asking are also beyond the control of BCDA, such as DENR’s granting of permits,” Casanova said.
Submitted on May 14, CJHDevco's proposal calls for a joint venture with BCDA on future projects in the John Hay Special Economic Zones (JHSEZ), including the remaining developable area.
However, the plan fall short of saying how the funds will be sourced to pay the P3 billion in debts to the government incurred from operating Camp John Hay.
“Based on the narrative, it even seems that its arrears are no longer being recognized by CJHDevco,” Casanova said.
Instead, CJHDevco is proposing to pay P100 million upon signing of a new agreement it calls “advance rental.”
The proposal seems to imply that the lessee is up to date with its payments up to 2011, Casanova said.
“This is farthest from the truth,” he said, adding that CJHDevco has acknowledged its billions of arrears during the signing of the 2008 Restructuring Memorandum of Agreement.
The alleged “better revenues for BCDA” that CJHDevco is proposing will come from the proposed new joint venture and extension of the lease period up to 2061, Casanova said.
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