RP faces hurdle in Japan property privatization

The government faced a major setback in its efforts to privatize its property in Fujimi Cho, Chiyoda Ku, Japan, a ranking Finance official said yesterday.

The source said the government has decided to suspend the bidding process due to concerns raised by Philippine ambassador to Japan Domingo Siazon.

Siazon, a former Foreign Affairs Secretary, wants the government to privatize only half of the estimated 4,000-square meter property. The other half, Siazon said, is being used as the ambassador’s residence.

“Siazon has some concerns,” the source said.

As such, the Department of Finance (DOF) will have to wait for the Office of the President to decide on the matter.

Other government sources said the bidding was suspended because there are interested parties seeking Malacañang’s help to bag the deal.

So far, nine firms submitted prequalification documents for the lease and development contract of the Fujimi property worth at least P3 billion.

A source said the government is expecting to award the contract by April but various concerns led to further delays in the bidding process.

Earlier, the government successfully awarded lease and development contracts for its 764-sqm property in Naniwa Cho and the 3,014-square meter property in Obanoyama Cho both situated in Kobe, Japan to Berg Co. Ltd. of Japan.

The sale of the Fujimi property is part of government efforts to raise revenues and boost state coffers.

The DOF has set a target of P30 billion from privatization for 2008 or one third of the P90.6 billion generated last year.

The government has been stepping up efforts to boost state coffers but the privatization of state-owned assets has become the major source of revenues amid shortfalls in tax collections.