Bacolod takes back port from developer

BY CHRYSEE G. SAMILLANO, BusinessWorld Correspondent BACOLOD CITY — Citing the various violations committed by developer Bacolod Real Estate Development Corp. (BREDCO), Bacolod Mayor Evelio R. Leonardia approved an ordinance mandating the city government to take over the port operations and the development of the 61-hectare property on the Bacolod reclamation area. But the property developer has not yet lost. Mr. Leonardia said the city government "would still welcome any move by BREDCO to go back to the bargaining table with us." City Ordinance No. 454 also allows the developer to retain its 70% share of the 180-hectare reclamation project "as compensation" for the works done on the property. In response to the takeover notice, BREDCO President Simplicio Palanca filed on Wednesday a civil case asking the court to nullify the ordinance and award his company the ownership and perpetual possession of the port. The developer also asked the court to declare Mr. Leonardia and eight other city officials guilty of breach of contract and order them to pay a total of about P10 million in damages and litigation expenses. Named as the mayor’s co-defendants in the case were Vice-Mayor Jude Thaddeus Sayson, Councilors Al Victor Espino, Dindo and Kevin Ramos, Homer Bais, Greg Gasataya, Celia Flor and Roberto Rojas. BREDCO developed the port as part of its 180-hectare reclamation project. Violations It was awarded the franchise to operate the port under the Comprehensive Revised Reclamation Agreement (CRRA) that BREDCO officials signed with the city government. A government review of the agreement in 2005, however, showed that BREDCO had assigned its rights over the seaport as collateral for bank loans, without the consent and knowledge of the city. "This exposes such [port] facilities to risks of foreclosure, possession, control, claims or suits by third parties — a situation most prejudicial to the interest of the city," Mr. Leonardia said. Another violation to the agreement was the transfer to Top Harbor International, Inc. of BREDCO’s franchise to operate the port and reclaim an additional 61 hectares of foreshore land. Other violations that were allegedly committed by BREDCO included failure to pay the P800,000 annual rental fee for the port and collection of toll fees on vehicles entering the port area. "It must be made clear to our people that, by law, the right to reclaim foreshore lands and the right to build and operate a port and harbor belong only to the government, which may choose to confer those rights on a private party as a privilege under a franchise and subject to faithful compliance by such private party of the terms and conditions that accompany the franchise," Mr. Leonardia said. Failed negotiations BREDCO was notified of these violations in August 2005. Negotiations were held in 2006, wherein BREDCO offered to increase its yearly rental every five years. The city government, however, rejected the offer and demanded a rental of P17.5 million equivalent to 12% of BREDCO’s gross income in 2004 based on the records of the Philippine Ports Authority. No new agreement was reached.