Ocean Adventure operator: SBMA move vs lease to have ‘chilling effect’

SUBIC, Philippines – The operator of the Ocean Adventure theme park said the decision of the Subic Bay Metropolitan Authority (SBMA) to preterminate its lease may cause irreparable harm to the local tourism industry and investors here.

Robert Gonzaga, president and chief executive officer of Subic Bay Marine Exploratorium Incorporated (SBMEI), said they were “surprised and greatly disappointed” with the SBMA’s move.

“It is so obviously designed to inflict harm on SBMEI. We were negotiating with them in good faith, but they decided to apply undue pressure instead,” Gonzaga said.

On Friday, September 27, SBMA Chairperson and Administrator Wilma Eisma simultaneously sent out a pretermination notice to SBMEI and a media statement about the impending closure of the theme park.

The SBMA pointed to SBMEI’s supposed multiple contract violations and failure to fulfill development commitments.

Under the pretermination order, the SBMA will repossess all of SBMEI’s 493.16 hectares of undeveloped property upon the lapse of the 30-day reckoning period. Then, it will give SBMEI 24 months to slow down its activities at the 11.6-hectare developed area that includes Ocean Adventure, Camayan Beach Resort and Hotel, and the newly opened Adventure Beach Waterpark, all run by the company.

Gonzaga said the SBMA’s remarks to media “already had an immediate and negative impact on the company, prompting concerned calls from tour operators, suppliers, guests, and other stakeholders.”

“We are dealing with the fallout of SBMA’s move. Rest assured that there will be no disruption to our business operations as a result of this,” he continued.

The SBMA, added Gonzaga, “decided to adopt an extremely unfair position to the point of recklessness.”

“It could potentially lead to tying up SBMEI property in litigation for many years to come, not to mention the chilling effect it will have on potential investors [of] the SBFZ (Subic Bay Freeport Zone), loss of hundreds of jobs, and a blemish to the agency’s reputation,” he said.

SBMEI employs about 500 workers from Olongapo City and Bataan.

Responses to ‘violations’

Gonzaga also responded to the violations alleged by the SBMA.

He explained that SBMEI was only made aware of the shortfall to the gross revenue share payments to the SBMA last year, after an audit in late 2018. He said they immediately offered a payment scheme, and have been paying since. “They then used this as one of their reasons to preterminate,” he said.

He added that the illegal reclamation and construction that the SBMA was referring to was not done by SBMEI, but a contractor of an SBMEI sublessor.

As for the unauthorized closure of public roads, Gonzaga said this refers to a gate leading to a residential area within SBMEI property “which was approved by previous SBMA administrations” and was “meant to keep residents secure.”

Issues on ease of doing business

Gonzaga also raised “a plethora of problems” allegedly experienced by SBFZ locators, involving processing of permits, approval of projects, and “inexplicable bureaucratic roadblocks.”

“We’re not alone in this situation. Most locators are just reluctant to speak, especially now that this is happening to us. But we’re not asking the SBMA to relax their rules. We’re asking them to respect the rules, and comply with the true spirit and intent of the ease of doing business law, as intended by President [Rodrigo] Duterte himself,” Gonzaga said.

In SBMA’s statement, Eisma had said that a group of locators speaking to the media on the lack of implementation of the ease of doing business law only served as a “further irritant between the parties.”

Eisma explained that the SBMA has implemented measures like putting up a one-stop shop for permits and extending the validity of the certificate of registration and tax exemption (CRTE) to 3 years, from 1 year.

But Gonzaga argued that one-stop shops are just “minimum compliance” with the law, and that the issuance of a CRTE is “meaningless” if a locator can’t process its permits.

Gonzaga said he and other locators decided to speak out because they were “already at the breaking point” and their investments “have been held hostage.” – Rappler.com