Prudential Guarantee raps CDC on multi-million peso bond issue

An assurance and guarantee firm yesterday threatened to sue officials of Clark Development Corp. (CDC) after it was accused of refusing to forfeit a P69-million bid bond it issued to a bidder for the privatization project of the former Mimosa Leisure Estate in Clark Field, Pampanga last year. 

Prudential Guarantee and Assurance Inc. (PGAI), in a letter to CDC Executive vice-president and chief operating officer Victor Jose Luciano, demanded a public apology from the latter for damage and injury it caused the company when it announced the filing of a case before the Makati City Prosecutor’s Office last month.

"A demand (for a public apology) is thus made upon you. Otherwise, we will pursue legal means, civil, criminal and/or administrative, to defend the rights and integrity of our client," PGAI, through its lawyers said.

PGAI said CDC should rectify the damage and injury suffered by reason of allegedly imprudent and libelous allegations which resulted in news reports that tag their company as an assurance firm facing a multi-million peso bond scam.

"You were quoted to have informed the reporters that Clark Development Corp. (CDC) has filed a case against our client PGAI with the Makati Prosecutors Office for refusal to forfeit the P69-million bid bond which was issued in relation to the failed bidding for the privatization project held on March 16, 2004,"  PGAI lawyer Felipe Antonio Remollo said.

"It may be recalled that you have acknowledged in your March 26, 2004 letter to Campbell & Associates, you have explicitly acknowledged that "During the bid opening of March 1 6, 2004, wherein you were present, your bid was declared a failure due to the absence of a written commitment from a licensed bank or cash deposit certificate in the amount of at least US Dollars Twenty-five million (US$25,000,000) particularly earmarked for the privatization project of the former Mimosa Leisure Estate," PGAI’s letter to CDC read.

It alleged that CDC did not conduct a re-bidding and re-advertising by reason of the failed bidding as mandated by Section 35 Article V of R.A. 9184 or the Government Procurement Reform Act.

"CDC has not suffered any loss or injury when it declared a failed bidding on March 16, 2004. To claim against the bidders bond would be undue enrichment on the part of CDC at the expense of PGAI which was never informed of any negotiation or arrangement between CDC and Campbell after the failed bidding on March 16. 2004," PGAI explained.

The issue stemmed from CDC’s announcement last month that it has sued PGAI for its refusal to forfeit the bid bond of Campbell, or of the bidders, in favor of CDC.

It said it wants the court to order PGAI to do so and also pay interest and the cost of having to file a suit which would bring the total amount to more or less P90 million.