The Department of Finance (DOF) disclosed yesterday that the Tokyo property has been left out of the award but the development of the Kobe properties are finally ready to start pending the finalization of the contract.
Finance Undersecretary Eric O. Recto confirmed reports that the bidding committee has identified the winners of the open bidding for the development contracts for the government’s property in the Naniwacho and Obanoyama districts in Kobe.
The development contract for both properties were won by Berg Corp., a Japanese corporation.
"Right now, we are negotiating the final terms of the development contract," Recto said.
Recto declined to disclose the terms of the contract but according to sources privy to on-going negotiations, the only contentious point was the government’s request for a shorter payment period.
Sources said Berg had one year to pay for the contract but the National Government wanted to be paid within six months.
The property in Naniwacho, Kobe was last valued at ¥478 million in 2004 and the Obanoyama was valued at ¥268.3 million.
Following the massive earthquake in Kobe, prices in the area have plummeted since the development contracts were bid out when the properties were estimated to be worth Y4.5 billion.
On the other hand, there was no clear indication of what the government intended to do with the more valuable Tokyo property in the Nampedai district.
The contract for the Nampedai property was won by another Japanese company, Urban Corp.
The bids for the much-coveted Japan properties have been extended at least four times since they were made available for development in 2003.
The Japan properties were originally bid out in November 2003 but the Arroyo administration did not award the development contract amid protests from legislators who thought the properties were actually sold.
Sources said the bidders willingly extended their bids, indicating their continued interest in the property.
The transaction became controversial when legislators led by Sen. Aquilino Pimentel opposed what they thought was the sale of the properties.
Under the terms of the privatization scheme, the government would get at least Y356 million when the agreement is signed between the Philippine government and the successful bidders and another Y384 million after three months.
The properties involved one four-storey building space in Tokyo with a total floor area of 2,489 square meters and two other properties in Kobe with 3,014 square meters and 764 square meters.
"Essentially, all three properties will be leased for 50 years under a variation of the BOT scheme," said Recto. "The properties are leased for an initial period of 25 years which would be renewable for another 25 years."