BCDA open to talks with sub- lessees affected by court ruling

Camp John Hay dispute 

BAGUIO CITY -- The Bases Conversion and Development Authority (BCDA) is willing to talk with sub-lessees of Camp John Hay regarding their respective contracts, but Camp John Hay Development Corp. (CJHDevCo) claims the state-run firm is obliged to honor the contracts.

BCDA president and chief executive officer Arnel Paciano Casanova told reporters in a chance interview the state-run firm is open to talks with sub-lessees of the Camp John Hay to come up with mutually acceptable terms on their investments following the Philippine Dispute Resolution Center Inc.’s (PDRCI) decision ordering CJHDevCo to return the property to BCDA.

“They (buyers) can now come to us and ask to renegotiate, or come up with mutually acceptable terms,” he said.

In February, the arbitration committee under the PDRCI ordered CJHDevCo to vacate the Camp John Hay and return the leased property, inclusive of all new constructions and permanent improvements to the BCDA.

The BCDA, meanwhile, has been found to be in breach for, among others, failing to set up the One Stop Action Center to issue national and local permits to enable CJHDevCo to develop the Camp similar to those established in the Subic and Clark Economic Zones.

The state-run firm has also been asked to return to CJHDevCo lease payments worth P1.42 billion.

“If these are buyers in good faith, we are willing to entertain their claims, but they must lay claim on the P1.42 billion to ensure that their rights are protected. Until such time they lay claim on the P1.42 billion, we cannot entertain them. But if they come to us, then we could actually talk and come to mutually agreed terms,” Casanova said.

In 1996, BCDA entered into a 25-year lease agreement with CJHDevCo for a portion of the John Hay Special Economic Zone.

While the lease agreement was only for 25 years, CJHDevCo sold 50-year leases to sub-lessees.

In a press conference yesterday, CJHDevCo chairman Robert John Sobrepena insisted the BCDA should honor the contracts with sub-lessees, citing the decision issued by the Baguio Regional Trial Court on March 27, which rendered the judgment confirming the decision of the PDRCI.

“As for the third parties…according to the court, their rights are governed by law on obligations and contract in the Civil Code. When CJHDevCo leaves, the BCDA is obliged to honor the contracts (of sub-lessees) until 2046. BCDA becomes the lessor. They (BCDA) have to respect that,” he said.

Casanova said the BCDA cannot honor the contracts of sub-lessees because they were not privy to the terms.

While the BCDA requested for copies of the contracts with sub-lessees from CJHDevCo, the state-run firm claimed the latter refused to provide them with the documents.

Sobrepena said the BCDA was aware of the contracts with sub-lessees because these investors had to secure permits from the state-run firm to proceed with the use and operations at Camp John Hay.

As for the refusal to provide contracts of sub-lessees to the BCDA, Sobrepena said the state-run firm requested such when the parties were already in litigation.

He said the BCDA has lost an estimated P5 billion from its refusal to accept the offer of CJHDevCo earlier to restructure the back rentals and pay annual lease for Camp John Hay.

Such funds could have been used to modernize the Armed Forces of the Philippines.

Sobrepena also said the BCDA’s actions are detrimental to the government’s efforts to attract firms to engage in Public Private Partnership projects as investors are looking for stability and rule of law.

“When there is no rule of law, investments can be gone overnight,” he said.

Still, CJHDevCo is hopeful the problem could be resolved soon so it could start development of other projects.

“We’re looking at other projects in Baguio,” Sobrepena said.

With Camp John Hay fast becoming an economic hub, the John Hay Management Corp. assured transparency and integrity in running businesses inside.

JHMC president Eloise Agbayani, in media briefing, assured 117 business enterprises inside John Hay Special Economic Zone the JHMC would ensure programs to bring robust economic development for Baguio.

Agbayani said aside from increasing revenues that bring in taxes, JHSEZ generated job increase through the years.

“Job generation has doubled the past three years as there are now more than 4,000 employees inside the John Hay Special Economic Zone and 70 percent of them are employed at the Business Process Outsourcing companies of IHG (Intercontinental Hotel Group) and Convergys,”Agbayani said.

In line with the JHSEZ policy to prioritize locals in hiring employees, Agbayani  said 90%  of the total workforce inside the zone reside in Baguio City and the nearby Benguet municipalities of La Trinidad, Itogon, Sablan, Tuba and Tublay and some parts of Cordillera.

Agbayani also reported that based on data of accommodation facilities inside Camp John Hay, guests accommodated increased by 13 percent or from 165,622 in 2013 to 187,153 tourists last year.

To ensure transparency inside JHSEZ, Agbayani said the John Hay Business Club had been the venue where JHMC and locators hear each other’s concerns and suggestions.

“With the JHBC, we are united and we listen to each other. In adherence to President Benigno Aquino’s governance of tuwid na daan, we also listen to our stakeholders,” Agbayani said.  – With a report from Carlito Dar