Baguio loser in arbitration ruling on Camp John Hay – mayor

Jessa Mardy N. Polonio

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Baguio loser in arbitration ruling on Camp John Hay – mayor
Baguio Mayor Mario Domogan says his city will have less funds for local projects if Camp John Hay is returned to the Bases Conversion and Development Authority

BAGUIO CITY, Philippines – Baguio officials said the city government stands to lose development funds if the Camp John Hay Development Corporation (CJHDevCo) returns Camp John Hay to the Bases Conversion and Development Authority (BCDA), as ordered by an arbitration tribunal

 

Baguio City Mayor Mauricio Domogan said  on Friday, February 13, that if the ruling made by the Philippine Dispute Resolution Center Incorporated (PDRCI) becomes executory, the city will have nothing to collect from its rightful share of rentals in the former US recreational facility. 

The city government is entitled to a 25% share from the lease-rentals of CJHDevCo which, Domogan said, is needed to fund local projects that cannot be accommodated in its P412 million-Internal Revenue Allotment (IRA).

Domogan said that CJHDevCo cannot be booted out yet without a court confirmation of the PDRCI decision.

BCDA claims that CJHDevco’s arrears have ballooned to P3.024 billion over the past 16 years. From this, Baguio City is entitled to a P750-million share.

Breaches in 2008 RMOA

Alfredo Yñiguez III, executive vice president and chief operating officer of CJHDevco, had said that the company’s  rift with BCDA started with breaches in the 2008 Restructuring Memorandum of Agreement (RMOA).

He claimed that BCDA stripped them of the ability to generate revenue by violating the agreement for the government to set up a One-Stop Action Center (OSAC) for the speedy processing of business permits.

CJHDevCo said there was a sole condition when they agreed to enter into the 2008 MOA – to establish the OSAC that would give 30-day release of permits, but this never happened.

Yñiguez said without permits, there will be no development, and thus, “no revenue.”

The official said losses over the period of non-compliance with the agreed conditions cannot yet be quantified but is more than the 2008 estimate of P250 million.

Yniguez said to date, there are 15 existing projects requiring various permits like the CJH Suites occupancy permit, pending for years.

Since 1996, Yniguez said CJHDevco paid BCDA approximately P1.4 billion in cash and properties, and has pumped in more than P2.6 billion in investments and improvements.

‘Convenient excuse’

BCDA president and chief executive officer Arnel Paciano D. Casanova claimed the issue raised by the lessee on the non-operation of the OSAC is just a convenient excuse to escape their debt obligation and to “turn the tables” against BCDA.

“In fact, it is a non-issue because contrary to the lessee’s claim, the OSAC has been operational. It has in fact issued several building and other permits to CJHDevCo, totaling 22 building permits in 2009, 28 permits in 2010 and eight in the first quarter of 2011. A total of 60 locators have already been granted permits to operate,” Casanova said in a statement.

He welcomed the decision as a “victory for government” but said BCDA is  “studying the decision and weighing our legal options.”

“While it is good that the property will be returned to government, it is not just that government will not be compensated for CJHDevco’s use of the facility for over a decade and for which it has earned billions,” Casanova said.

The arbitration tribunal that ruled on the Camp John Hay dispute is chaired by Mario Valderama.

In a separate opinion, co-arbitrator Teodoro Kalaw IV said CJHDevco should pay rentals in arrears amounting to P2.4 billion.

 

In a decision dated September 30, 2014, the Court of Appeals agreed with the BCDA’s position that “it is the public that suffers for the failure of CJHDevco to fulfill its obligations.” – Rappler.com

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