COA clears lease deal between ALI, Negros Occ

BACOLOD CITY , Philippines  – After 14 months, the Commission on Audit (COA) finally approved the contract between Ayala Land Inc. (ALI) and the provincial government of Negros Occidental for the sale and lease of the 7.7-hectare prime property in this city.

The long-awaited COA approval came three weeks after ALI “disengaged” from its proposed P6-billion development project in the said property due to alleged COA inaction on the deed of conditional sale (DCS) and contract of lease (COL) for the property, which were submitted to them in July 2011.

In a 20-page resolution dated Sept. 21, 2012, a copy of which was distributed by Gov. Alfredo Marañon Jr. to the media Thursday, COA stated that considering the favorable recommendations of the COA audit team leader (ATL), the provincial government of Negros Occidental, the COA regional director in Western Visayas, the DCS dated April 26, 2012 is approved.

The DCS states that ALI will purchase from the provincial government 3.6587 hectares of land worth P750 million subject to an initial payment of 50 percent, with the balance to be paid on a quarterly basis over a one-year period.

However, the request for approval of the COL is hereby “remanded” to the ATL and provincial government “for contract review on post-audit basis,” the COA resolution further stated.

COA said the request for approval for the COL is not within the jurisdiction of the commission proper because it does not convey the title or ownership to Ayala Land.

However, the lease contract will be subjected to a contract review, it said. To be leased is 4.0481 hectares at P2,955,133 a month, with rent increasing at 10 percent every five years. Ayala will deposit P35,461,356 covering one year rent, the contracts stated.

Assistant provincial legal officer Mary Ann Manayon-Lamis said the provincial government will earn from Ayala Land P2.7 billion over the 50-year lease period, and P750 million from the sale package, or a total of P3.5 billion.