BCDA ‘seriously considering’ legal suit vs Camp John Hay Development Corp

The Bases Conversion Development Authority (BCDA) said yesterday that it is "seriously considering" filing a legal suit against the Camp John Hay Development Corp (CJHDevCo) for the payment of some P1.2 billion in "due and demandable" arrears.

BCDA subsidiary John Hay Management Corp. (JHMC) lawyer and spokesperson Lyssa Pagano-Calde admitted that "the filing of criminal and civil suits against the consortium may become inevitable in order to protect the interest of BCDA and the beneficiaries of the John Hay project."

Pagano-Calde, however, said that the BCDA is "still open to whatever viable proposal for a mode of settlement that may be submitted by CJHDevCo to comply with its outstanding payables."

She warned though that "time, however, may be running out for them."

Pagano-Calde had earlier lamented "the absence of a clear indication that CJHDevCo is going to settle its unpaid obligations."

CJHDevCo had submitted a proposal in February this year that would reduce its arrears from P1.2 billion to P192,000, but according to Pagano-Calde the proposal was "outright unacceptable."

Pagano-Calde said that accepting the proposal would be "criminal" on the BCDA’s part as it would rob the beneficiaries of the John Hay project of their rightful share in the proceeds of the project and would deprive other major infrastructure projects for Central Luzon an important funding source.

JHMC had hoped that CJHDevCo would offer a well-defined mode of settlement, a planned return of undeveloped areas and specific BCDA monthly share in the facility’s recurring income.

Instead, the CJHDevCo proposal was anchored on drastically reducing future lease rental payments which would cut their current outstanding liabilities by more than half.

JHMC and CJHDevCo had returned to the negotiating table late last year for a possible third restructuring of the over P2.1 billion back rental of CJHDevCo for Camp John Hay.

According to BCDA president and chief executive officer Narciso Abaya Jr., CJHDevCo had stopped its rental payments for the Baguio property in December 2003 after the Supreme Court ruled that CJHDevCo was not entitled to incentives.

The BCDA and CJHDevCo had reached a second debt restructuring agreement March 2003 and CJHDevCo was able to make a payment in July 2003.

However, following the SC decision in October 2003, CJHDevCo stopped rental payments anew to BCDA.

CJHDevCo had first sought a debt restructuring of its rental/lease payments to BCDA in 1999 with the original amount involved of P425 million.