Camp John Hay shares tiff: Mayor pushes BCDA ‘debtfor equity’ swap proposal

By Isagani S. Liporada

BAGUIO CITY – Mayor Mauricio Domogan bared the city is reevaluating the Bases Conversion Development Authority “debt-for-equity” swap offer to end the deadlock between the city and BCDA in relation to the city’s Camp John Hay shares.

Records show BCDA owes 652.6-million to the city. This represents unpaid shares of the city from 1997 up to January 2010 less payments made in the form of city priority projects.

The sum is based on the original deal between BCDA and development consortium of Fil-Estate Management Inc., Penta Capital Investment Corp. and CSM Development Corp. with the city as beneficiary.

Earlier BCDA offered a debt-for-equity swap deal canceling a portion of its debt in exchange for golf shares and log cabins.

Domogan said “there are benefits” if the city considers the offer now.

Looking at the ejectment case filed by the Government Service Insurance System against the city, the mayor said settlement with BCDA by considering the offer may result in the city finally securing the Baguio Convention Center while adding other assets to the city’s stock.

“More,” Domogan said, “BCDA could make it easier on us in our hopes to advance P50-million from our future shares to develop BCC.”

During a media forum, Domogan said, “We’re hoping BCDA chair Narciso Abaya is not replaced under the new administration.”

“We have been working with him regarding release of our lease rental shares from the operation of CJH and we’re confident, he would work with us in finally giving the city what it rightfully deserves.”

“We are trying to look for a win-win solution for all parties here.”

“Hopefully,” he said, “we can likewise find an ally in the person of the incoming GSIS chair vis-à-vis the BCC.”

Talks on the CJH lease was sparked by questions surrounding GSIS ejectment case against the city government. The city-GSIS deal covering the BCC is for a whopping P250-million purchase price.

Domogan revealed, “BCDA has so far remitted a total of 100-million for payment of the Baguio Convention Center to GSIS.”

“Earlier, BCDA tried to give another 50-million which could have reduced our BCC purchase debt to 100-million… unfortunately, GSIS did not accept the offer.”

Some city councilors smelled ‘bad faith’ in the debt-for-equity offer and shot it down.

Consequently, BCDA acceded to the council’s decision and instead, offered partial settlement of P54-million.

The debt-for-equity swap offer came in the heels of a third restructuring agreement between BCDA and CJH Development Corporation (CJHDevCo) – developer of the erstwhile American military base.

The dads observed CJHDevCo would not ask for debt restructuring if it were capable of remitting promptly to BCDA.