HGC rejects P2.9-B R-II Builders offer to settle Smokey Mountain dispute

MANILA, Philippines - State-run Home Guaranty Corp. has rejected the P2.9 billion offered by R-II Builders to settle the dispute over the Smokey Mountain Development and Reclamation project.

Manuel Sanchez, president of Home Guaranty Corp., made the comment following businessman Reghis Romero II’s offer made in June.

“Romero is making an offer which is not acceptable to us, primarily because …(of) the amount that he is offering and … because of the conflicting claims (most of which) are actively being pursued in different courts,” Sanchez said.

R-II Builders and the National Housing Authority (NHA) formed a joint venture back in 1993 for the development of Smokey Mountain. Home Guaranty Corp., meanwhile, acted as the guarantor of bonds which were issued to raise additional funding for the project.

But the government and R-II Builders have had disagreements during project implementation, resulting in a string of cases being filed against one another.

Romero said in June the offer may be raised up to P5 billion to reimburse the Home Guaranty Corp’s. exposure on the project.

But Sanchez said the area is worth P9.5 billion, which is way above Romero’s proposed amount to settle the dispute between the two entities.

“Romero also wants mutual withdrawal of cases. If we do that, the claims of the government will be lost forever. We have to make sure that the settlement would be fair and proper,” Sanchez said.

In a related development, Sanchez said the government has also been unable to recover earnings from its stake in Harbour Centre Port Holdings, Inc.

Sanchez said the government has been kept in the dark on the firm’s financials even though it has a 32 percent stake in the company. The remaining 68 percent is held by R-II Builders.

“We don’t have any seat in the board although we own 32 percent of the company. They don’t give us a copy of the records so we don’t know how much they are making a year and how much we are entitled every year,” Sanchez said.