BCDA given mandate to enforce John Hay contracts

By Dexter A. See

BAGUIO CITY – Malacanang has given the state-owned Bases Conversion and Development Authority the mandate to compel Camp John Hay Development Corp.  to comply with its contractual obligations under the 50-year lease agreement for the development of the 247-hectare John Hay Special Economic Zone into a world-class tourism center, Secretary Herminio Sonny Coloma of the Presidential Communications Operations Office said here last week.

            

As part of the executive branch, Coloma said BCDA is empowered to use all legal means to enforce contractual obligations in the agreement.

           

 “We adhere to policy of good governance, thus, we also expect the private partners of the State to comply with their contractual obligations in a policy of transparency and accountability,” Coloma said.

           

He added every action being taken by concerned government agencies and local governments in the enforcement of contractual obligations is geared towards the protection of the rights of the people over the properties of the State.          

           

Last month, the BCDA issued a notice of termination to CJHDevCo rendering the 50-year lease agreement signed in October 1996 for the development of the JHSEZ into a world-class tourism complex as unenforceable because of the alleged failure of the developer to pay over P3 billion in accumulated lease rentals over the years where the city government is entitled to a share of around P750 million.

           

 However, Alfredo Yniguez, CJHDevCo executive vice president and chief operating officer, claimed the developer overpaid BCDA since it was able to pay P1.44 billion in lease rentals representing at least 35 percent of its supposed P4.2 billion lease payments over the past 16 years.

           

He said BCDA was only able to deliver 20 percent of the total 18 hectares developable area within the JHSEZ that caused them over P11.6 billion in lost revenues during the said period since they were not able to comply with the 5-year period to fully develop the property because of the breaches on the part of the State-owned corporation.

           

 “We are not referees. We will leave the matter to the BCDA to decide what will be the best thing to do with the current impasse in John Hay,” Coloma said.

           

Both parties, he added, could explore other avenues for arbitration to settle their problems since Malacanang has to attend to more pressing problems rather than interfere in intra-corporate disputes which could be settled by other competent bodies.

            

Coloma said Malacanang is confident that the current impasse inside the former American rest and recreation center will be settled via a “win-win solution” so that the general welfare will continue to reign and concerned parties will be able to settle their contractual obligations without affecting the stake of the public in the said property.

           

 “We want investors who comply with their contractual obligations and not make unnecessary excuses to delay payments of their rentals which in turn affect public welfare since implementation of development projects and improved delivery of basic services to the people are significantly derailed,” he added.