MANILA, Philippines — The Cagayan Economic Zone Authority (CEZA) has cancelled the 25-year license agreement with Foremost Cagayan Development and Leisure Corp. (FCDLC) after an evaluation showed it is “grossly disadvantageous” to the government and it failed to deliver on its investment commitments.
CEZA administrator and CEO Jaime Escano terminated the FCDLC license after three years.
“We are constrained to terminate the license agreement effective immediately on the ground that the same is grossly disadvantageous to CEZA,” Escano said in a letter to FCDLC president Chan Wa Fai.
“Upon the conclusion of the audit and evaluation that was conducted on all licensees and registered enterprises engaged in interactive gaming activities, we found that Foremost Cagayan Development and Leisure Corp. did not comply with its obligations under its license agreement.”
CEZA authorized FCDLC to establish and develop a smart city and industrial park, an international airport, generation and distribution facilities for power, water or other public utilities and residential complexes or township within the Cagayan ecozone, all in connection with the development, operation and conduct of interactive gaming facilities and land-based casino enterprises and facilities.
FCDLC was granted a 25-year license in 2019 to operate an online casino inside the Freeport. As part of the agreement, FCDLC has committed to invest $500 million or $33.333 million over the next 15 years to develop the various complexes.
Escano said FCDLC did not make a similar investment commitment and only warranted that “it has the financial capability to undertake the required investment commitment.”
FCDLC has not proven to be financially capable to undertake the required investment commitment, he said.
CEZA said the FCDLC did not fulfill its commitment to invest $500 million or $33.333 million over the next 15 years.
It noted that FCDLC only invested nearly P250 million in the last three years while incurring losses during the same period.