SM Prime contests Bacolod property award

MANILA, Philippines - SM Prime Holdings is contesting the award to Ayala Land Inc. of the 77,068-square meter prime property in Bacolod City owned by the provincial government which was bid out early this month.

In a statement issued yesterday, SMPHI counsel Vince Bayhon described as illicit the negotiated sale resorted to by the provincial government of Negros Occidental to dispose of the property in view of the pendency of the injunction petition filed by SMPH against the governor and the members of the committee on awards and disposal of properties which is pending with a Bacolod regional trial court.

In its petition, SMPH said it submitted a far more superior bid from that of ALI in the July 7 bidding, but which was later declared a failure after both SMPH and ALI allegedly submitted bids below the appraised value of the property. SMPH said the awards committee only disclosed the appraisal value of P19,500 after the actual bidding.

Bayhon said SMPH’s non-participation in the negotiated transaction last Friday was prompted by the requirement imposed by the awards committee for the participants to issue an undertaking that no legal action will be initiated against the committee and the provincial government by the aggrieved parties.

“SMPH did not lose by default, and our interest in the project remains,” Bayhon said, reacting to statements attributed to Gov.  Alfredo Maranon. “In fact, SMPH won the July 7 bidding,” he asserted.

Bayhon added: “The alleged floor price or appraisal value was never disclosed during the public bidding, even after the sealed bids of both parties were opened and read aloud.  The belated disclosure of the floor price the next day was a mere afterthought and done with bad faith to deliberately provide an excuse for the Committee’s rejection of SMPHI’s bid.”

Even if the floor price was set before the public bidding, Bayhon said, SMPHI’s bid was still compliant under COA rules. The COA Memoranda Nos. 91-712 and 88-569 allow a variance of not more than 10 percent between the floor price and the bid. SMPHI’s bid was only three percent lower than the alleged floor price and therefore, still compliant or acceptable.

“As such, the declaration of failure of bidding was a sham and disingenuously intended to pave the way for direct negotiations with its preferred party, ALI,” Bayhon added.

He said the Bacolod court is yet to rule on SMPH’s petition questioning the validity of the declaration of a failure of the July 7 bidding, since its bid, aside from being compliant, was also superior from that of ALI. RTC Judge Estefanio Libutan Jr. has set for July 21 the full-blown hearing on the SMPH injunction petition.

SMPH proposed to purchase portions of the property at P18,885 per square meter  and lease the remaining portion at P65 per square meter, or well within the price set by the awards committee. ALI submitted a bid that effectively offered to purchase the property at P17,000 per square meter, and a lease arrangement of P50 per square meter.

In yesterday’s negotiated bidding, Ayala Land offered to acquire on freehold basis 36,587 square meters of land at P20,500 per square meter and on leasehold basis 40,481 square meters of land at P73 per square meter per month for 50 years, its vice president, Jose Emmanuel Jalandoni, said.

SMPH has earlier asked the court to stop the scheduled negotiated sale of the property last Friday pending its determination of the validity of the decision of the awards committee to declare the July 7 bidding a failure, and for it declare SMPH the rightful winner in the exercise.