Clark Development Corp seeks TRO to stop confiscating its assets

CLARK FREEPORT, Pampanga, Philippines – Government bank depositories have started to implement a notice of garnishment of some P214 million of the assets of state-owned Clark Development Corp. (CDC) in favor of the private contractor of the Philippine National Construction Corp. (PNCC) over the payment for the Sacobia bridge built here way back in 1998.

The CDC, in a letter on Aug. 18, asked President Aquino to intervene in the case that seemed to gain faster pace in the last months of the term of former President Gloria Macapagal-Arroyo, as records have shown.

This, even as the Supreme Court has yet to issue a temporary restraining order as petitioned by the CDC on Sept. 8 to stop the implementation of the garnishment order.

In a letter to the CDC, Benilda Abrasia-Tejada, executive vice president and chief legal counsel of the Development Bank of the Philippines (DBP), said her bank had no choice but to comply with the execution of the garnishment order by releasing the CDC’s bank deposits amounting to P60,752,167 in favor of PNCC “joined by Ciriaco Corp.”

Ciriaco is the private firm tasked by the PNCC to build the bridge whose original cost was P700 million.

The Land Bank of the Philippines (LBP) is set to follow and release another P170, 704,469 of CDC’s deposits also to the same recipient.

The garnishment order, served recently to the banks and even investors at this freeport, was based on a decision of the Office of the Government Corporate Counsel (OGCC) on Dec. 8, 2008, which was affirmed by the Department of Justice on April 24, 2009 and further affirmed by the Office of the President on Jan. 5, 2010 ordering the CDC to comply with the demands of the PNCC and Ciriaco.

In a letter to President Aquino dated Aug. 16, CDC president and chief executive officer Benigno Ricafort recalled that in 1997, the CDC and PNCC entered into a contract for the latter to construct the Sacobia bridge for P700 million.

“PNCC constructed the bridge through its private sub-contractor Ciriaco. It was completed sometime in 1998 and PNCC turned over the project to the CDC,” the letter recalled.

Ricafort said in his letter that the controversy now brewing “involves the collection by Ciriaco from PNCC the amount of about P17 million representing unpaid progress billings, and the collection from CDC of about P153 million representing the costs due to foreign currency adjustments or a total of P170 million.”