Megaworld calls for transparency in FTI sale

MANILA, Philippines - The Megaworld group yesterday called for government transparency in the planned disposition of the Food Terminal Inc. (FTI) complex following reports that the government is already in the final stages of negotiations with a mysterious buyer.

In an interview, Empire East Land Holdings president Anthony Charlemagne Yu also proposed that the government should also consider the possibility of dividing the FTI property into four parcels to be bid out separately, instead of just one. Empire East is a subsidiary of Megaworld Corp.

It will be recalled that following two failed biddings conducted under the previous administration, the Megaworld group submitted a firm offer to acquire the FTI property for P14 billion payable in cash, with a commitment to respect all existing leases.

Earlier, Robinsons Land Corp. was also reported to have submitted an unsolicited proposal to acquired the 103-hectare lot from the government.

The FTI property to be privatized covers 103 of the 120-hectare property in Taguig. The remaining 17 hectares of the property is already owned by the National Food Authority.

Of the 103-hectare lot, 24 hectares have been declared a special economic zone, with some parcels still subject of long-term contracts-between the Philippine Economic Zone Authority and locator firms-that would be honored even after privatization, while 79 hectares of the FTI complex are free for development.

FTI was originally built to be a food processing and consolidation center for agricultural products. The terminal houses more than 300 small-to-medium scale companies engaged in manufacturing, garments and electronics.

Yu said that in response to their letter, the government said that it was still considering what direction to take as to the disposition of FTI – whether to sell it or just lease it out.

Soon after, the Department of Finance (DOF) made pronouncements that it was considering just leasing it.

Yu noted that a year after, or just recently, the Senate committee on agriculture through Senator Francis Pangilinan conducted a hearing particularly on the issue of the National Food Authority, where it was revealed that government is in ongoing discussions with an interested party.

“We and other developers such as Filinvest were surprised why all of a sudden, government is not conducting a public bidding. According to reports, the negotiations with this mysterious buyer is already in the final stages. There are rumors that the offer made by that buyer was P19 billion, but to be paid in terms. If we take into account the taxes, the net offer would be closer to P14 billion. It is inaccurate for government to say that negotiations are justified because of the two previous failed biddings under the Arroyo administration. Remember that at that time, the business climate is different. Now, with the new administration, there is increased trust. So they cannot invoke the failed biddings to justify negotiations,” Yu said.

There are rumors that Ayala Land is the mysterious buyer that is already in final negotiations with the government for FTI.

Considering that the FTI disposition will be the government’s biggest privatization effort and the first under the present administration, he emphasized that the government should be true to its commitment of transparency. “The Aquino government has said that it favors biddings (solicited proposals) rather than unsolicited or negotiated ones. Why is it that all of a sudden, they are changing the tune for this mysterious buyer,” he said.

“Assuming that there is a negotiated bid, why all this secrecy. They are saying that anyway, the proposal will be subject to Swiss challenge which they maintain is the same as a bidding. But why entertain this proposal in the first place? We have submitted our proposal. We proposed to pay in cash,” he added.