Contract signed at last: Filinvest, city ink SRP venture deal

CEBU - Finally a sale!

The Cebu City Government and Filinvest Land Inc. (FLI) yesterday signed a joint venture agreement for the development of 50.6 hectares in the South Road Properties (SRP).

“Finally, the long route of wanting to seal this agreement has come, after all the hard work, we thank everybody and the Sto. Niño for protecting the SRP,” said Acting Cebu City Mayor Michael Rama.

Rama, after having been given authority by the City Council, signed the contract with Andrew Gotianun, president of FLI with the city councilors and members of the Joint Venture Selection Committee (JVSC) as witnesses.

Rama made special mention and requested a warm round of applause to Cebu City Mayor on Leave Tomas Osmeña for being responsible in building the dream and realizing the SRP project.

Osmeña expressed his thanks and happiness in a text message sent to Rama over yesterday’s momentous development.

JVSC Chairman and City Administrator Francisco Fernandez along with Cebu Investment Promotion Center head Joel Mari Yu were all smiles after going through a tough negotiation for the best interest of Cebu City in the said deal.

“All’s well that ends well,” Fernandez said.

Fernandez said he is thankful that everything turned out positive for Cebu City despite certain hitches along the way, which were considered as “sweet challenges” for the forging of the agreement with FLI.

JVSC proceeded with the awarding of the P25 billion project last week after no other qualified interested party submitted its intent to challenge FLI’s unsolicited proposal.

The Provincial Government attempted to qualify, but was not able to qualify to submit a competitive challenge.

In the next 30 days, FLI will already make a down payment of P348 million, from the first part of the contract, which is the outright purchase of 10.6 hectares amounting to P1.592 billion. The balance will be payable in the next three years.

The said amount is enough to cover the first semi annual payment of the P6 billion-loan of the city.

Yu, who acted as the main negotiator of the city government panel said there will be four payments in three years, first the down payment of P348 million, followed by another payment prior to the end of the 2009, the second will be on 2010 and finally in 2011.

On the other hand, the second part of the contract covers 40 hectares to be developed under a joint venture.

He said the city is assured of an income from 10 percent gross sales of built up units or a guaranteed premium, whichever amount is higher.

After the signing, Yu said, the next step is the finalization of the putting up of utilities such as water and electricity.

It has to be done, Yu said, since FLI is expected to start constructing in the next six months.

On the other hand, Yu said, they are entertaining the unsolicited proposal of Mactan Rock International, for the provision of water in the entire SRP area, under a joint venture.

Just like FLI, the same process will be observed with Mactan Rock as it will face competitive challenges from private entities.

Since the SRP was opened for sale, lease or joint venture in 2007, the city has only leased out a three-hectare portion to Bigfoot Global Solutions.

On behalf of Gotianun, Tristan Las Marias, FLI VP for Visayas and Mindanao, said that the hard work is not over as it is yet to start.

He said they will start developing as soon as their master development plan will be finalized.

Other than the FLI offer, Yu said they are also negotiating with SM Prime Holdings Inc., Ayala Land and Pueblo de Oro for the sale of other portions of the SRP. –/NLQ (THE FREEMAN)