Firm wins Mimosa bid; wants partner or sellout due to financial woes

By George Trillo

CLARK FREEPORT, Pampanga — Waterfront Philippines Inc., winning bidder in the privatization of the billion-peso Mimosa Leisure Estate here, is looking and negotiating with a foreign financial firm for a tie-up arrangement or total sell-out. This developed after it was established that Waterfront Philippines has outstanding financial obligations to the Philippine National Bank amounting to P739.6 million, and P375 million to the Social Security System.

Clark Development Corp. which has been operating and managing the 320-hectare Mimosa Leisure Estate since December 1999, conducted last June 6 an open bidding participated in by two qualified bidders.

The two bidders were Waterfront Philippines and I&D Capital Joint Venture of Korea. The CDC bids and awards committee declared Waterfront as the winner on technicality after it noted that I&D Venture failed to insert the bid’s security check in the second envelop although the security check was presented right on the spot during the bidding.

A former CDC director cast doubt over the capability of Waterfront to pay to CDC some P872.5 million within 90 days as provided for in a memorandum of understanding that will mature into a lease agreement on Oct. 10, 2008. The MOU was entered into and between CDC and Waterfront after the bidding. Waterfront is required to remit P770 million to CDC.

The financial deliverables of Waterfront should include the performance security equivalent of five percent or P50 million of the total investment commitment, and P52.5 million for the "Going Concern Value" (GCV), advance guaranteed lease of R160 million, and another P160 million sd security deposit.

CDC’s legal department said that it cannot allow the winning bidder an extension of from 30 to 45 days for Waterfront to settle its obligation, saying that it is not in conformity with CDC bids and awards committee’s terms of reference (TOR).

The legal officer said that furthermore, CDC has not committed deficiency in the terms of reference of the bidding.

Some CDC executives said that they will be in an awkward position to grant the request for the grace period to Waterfront because they already denied the request of the losing bidder for a grace period in submitting its bid security check.