Tax payments or campaign funds?

It cannot helped if the recent attempt by the Caloocan city government to take over the Gotesco Grand Central Mall is being viewed with distrust and skepticism by a lot of people.

Caloocan City is trying to evict the Ever Gotesco management from the mall on the strength of a March 6, 2009 writ of possession issued in favor of the city by Judge Oscar Barrientos of the Caloocan Regional Trial Court Branch 26.

The eviction order was based on Caloocan’s claim that Gotesco owed the city P722.3 million in unpaid real property taxes covering 23 years.

Caloocan owns the 22,685 square meter property, leased by Gotesco Investment, Inc. from the city in 1983 for 25 years renewable for another period of 25 years at the option of Gotesco. Pursuant to the parties’ lease agreement, the company constructed Gotesco Grand Central Mall within the leased premises.

Gotesco became the owner of the land on which it built its mall only on Sept. 19, 2008, when it signed a memorandum of agreement with Caloocan City on the terms of payment for the P182.08 million purchase price of the land.

Since it is the landowner, not the lessee, who is liable to pay real property taxes, and Gotesco became landowner only late last year as claimed by the Gotesco group, it follows then that Gotesco became responsible for paying the realty taxes on the property only last year.

So how is it possible that Gotesco is being evicted for non-payment of real property taxes for the last 23 years?

The sale was initially agreed upon by Gotesco and Caloocan City during the term of Mayor Macario Asistio. A deed of absolute sale was entered into Sept. 6, 1990 and a transfer certificate of title was issued in Gotesco’s name only on April 2, 1998.

But Asistio’s successor Rey Malonzo refused to honor the sale and sought the cancellation of the title issued to Gotesco. The latter brought the matter before the Supreme Court which in May 2006 ordered Caloocan City to honor the sale.

In Sept. last year, Gotesco and the city government executed a memorandum of agreement (MOA) relative to the payment by Gotesco of the purchase price as embodied in the deed of absolute sale dated Sept. 6, 1990. Gotesco last Sept. 19, it issued two checks for the P30 million downpayment and 36 postdated checks for the balance. The city treasurer of Caloocan accepted the payment.

Even if Gotesco’s claim that it became owner only last year were incorrect and that it became the owner upon the issuance of the TCT in 1998, that is still short of the 23 years for which back taxes are being levied upon Gotesco.

But a month after accepting the downpayment, the city told the mall lessees and tenants to pay rentals to the city government and to sign new contract with Caloocan City.

The lessees were also told that they will be denied business and mayor’s permits if they continue to deal with Gotesco’s management, and will be immediately given the same if they’d sign new contracts with Caloocan City.

The city has also issued a notice to the security firm employed by Ever Gotesco at the mall, saying its services had been terminated as the city government had already taken control of the mall’s management.

Even the writ of possession issued by Judge Barrientos last March 6 is now being questioned since the order contravened the writ of preliminary injunction of a co-equal court, Branch 11 of the Manila RTC, dated Dec. 16, 2008 which stopped Caloocan officials from taking possession of the mall.

So what is the real motive behind the persecution of Gotesco by the Caloocan city government? You be the judge.

Scam or no scam?

A few weeks’ back, this column wrote about how some groups, possibly including losing bidders, have been barking up the wrong tree when they alleged certain anomalies in the procurement of equity for the repair and rehabilitation of irrigation facilities by the National Irrigation Administration (NIA).

For the sake of fairplay, we are giving a chance to these groups to elaborate on these alleged anomalies.

Senator Mar Roxas claims that the acquisition of P1.4-billion worth of heavy machines by NIA may have been overpriced by as much as P300 million, even as he branded this as another fund-raising scheme by administration senatorial candidates for the 2010 elections.

Roxas says the NIA attempted to award last Jan. 16 the project to two disqualified bidders who enjoyed backing from influential people in government.

In Resolution No. 880, Roxas sought an inquiry by the Blue Ribbon committee into the alleged manipulation of the bidding process, which he said was made “precisely to limit the number of participants in the bid project.”

Roxas said the confusion over the invitations to bid and the short period for bidders to submit their proposals left out the local market’s top two heavy machinery suppliers and left Civic Merchandising and the Transport Equipment Corp .to bag the contract, which should have been disqualified because they failed to meet the total sales requirement stipulated in the NIA rules for that particular project.

Industry leader Maxima Machineries was able to meet deadline, but was disqualified purportedly because of incorrect documents, while Monark Equipment Corp. was disqualified at the onset because there was confusion on the deadline for the purchase of bid documents, according to Roxas.

Monark has been in engaged in the heavy equipment distributorship business for 21 years and Maxima for 20 years at the time of bidding.

Because of its outright disqualification from the bidding, Maxima filed an appeal to the NIA bids and awards committee stating that the 25-year rule is not included in the implementing rules of the Government Procurement Act and certainly not a yardstick for qualification.

And the minimum requirement is not 25 years in operation but only three years, they add.

Because of the imposition of the 25-year rule, Monark and Maxima were disqualified.

Several more questions were raised as to alleged deviation by NIA from usual bidding procedures.

We hope that all these can be ironed out soon because our country cannot afford to have a delay in its agricultural programs. The importance of irrigation cannot be emphasized enough.

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