MWSS may cancel contract with SM, offers refund

A government water agency may cancel its lease contract with SM Prime Holdings Inc., the Philippines’ largest mall developer, an official said. "The contract may be cancelled," Metropolitan Waterworks and Sewerage System (MWSS) officer in charge Macra Cruz told GMANews.TV. Signed last May 27 — a month before President Benigno Aquino III assumed office — the agreement will allow the mall operator to lease MWSS’ Katipunan Road property in Quezon City for 25 years for less than P100 per square meter a month, an amount that may be too low, sources said. Covering 1.4 hectares, the property is located in the MWSS’ Balara compound within lots occupied by the Philippine Waterworks Association (PWWA), a group of public and private entities engaged in water supply development, and the Local Water Utilities Administration (LWUA), an agency that helps develop water districts across the country. SM Prime, controlled by Henry Sy — the richest Filipino according to Forbes Magazine’s July 2010 ranking — reportedly plans to put up a stand-alone supermarket in the area. The lease agreement was signed by then-MWSS administrator Diosdado Allado and SMPH president Hans Sy, as indicated in a copy of the document obtained by GMANews.TV. (See: MWSS leases Katipunan property to SM Prime Holdings) Last Friday, the agency issued a P33-million check to SM Prime, representing the refund of the company’s initial lease and rental payments, Cruz added. However, no one from SM Prime reportedly agreed to receive the check, Cruz said. The check was reportedly issued and dated last Friday, August 20, a day after the MWSS Board held a meeting, sources familiar deal said. Earlier, SM Prime paid MWSS P33 million as its initial lease and rental deposit for the project. (See: MWSS receives P33-M check for lease of property) Worth P33,248,892.86, the check dated July 13, 2010 represented “lease and rental" payments for the MWSS property. Various text messages sent to Jeffrey Lim, SM Prime’s executive vice president, have remained unanswered. Attempts to reach Lim at his office were unsuccessful, as an assistant repeatedly explained that he is in a meeting. SM Prime has a market capitalization of P13.329 billion. —JE/JV, GMANews.TV