New NEDA rules on joint ventures won’t affect city

The Cebu City government has heaved a sigh of relief after the National Economic Development Authority clarified that local government units are exempt from the new guidelines that govern joint ventures between government-owned corporations and the private sector.

The city was earlier disturbed by the NEDA-drafted guidelines because under a joint venture agreement, the investors reportedly do not have to give money up front but would just share the proceeds of the investment with the LGU.

Mayor Tomas Osmeña had said that the new guidelines have the potential to affect the city’s dealings with future investors of the South Road Properties, as its conditions are not applicable to LGUs. 

Yesterday, however, Osmeña said NEDA had made it clear that LGUs are not covered by the guidelines. NEDA drafted the guidelines upon instruction of President Gloria Arroyo early this year.

LGUs, however, may opt to adopt the NEDA guidelines but Osmeña said the city will be drafting its own, considering that bidding for properties at the SRP will be opened anytime soon.

Osmeña said 32 hectares will be opened for bidding, 12 of which will be directly sold and the rest would be utilized for possible joint ventures.

Osmeña reiterated that he wants the SRP to be sold and developed not by lots but by complexes just like the development in Makati where structures are virtually connected.

He said earlier the city plans to put up a central transport terminal at the SRP so that people would not have a difficult time going into the companies that would invest there.

“We are not interested in developments that will just sub-divide the lots and sell them,” Osmeña said.

Like city administrator Francisco Fernandez, Osmeña said he is also not personally privy of the report that the world’s seventh richest Arab, Mishal Kanoo from Dubai, has signified to invest in Cebu.

“I don’t consider it a live case, that’s just tsismis,” he said, adding that the other interested investors have been studying the potential of the SRP for a year. 

Last week, Senate President Pro Tempore Jose “Jinggoy” Estrada was quoted as saying that he was able to meet with Kanoo, who reportedly told him that his brother had visited Cebu recently and that it is “a good place to make investment and do business.”

Estrada was in the United Arab Emirates recently to meet with Filipinos there. The 39-year-old Arab businessman reportedly has an estimated personal fortune of $1.7 billion.

The Arabian businessman reportedly told Estrada that the Philippines is rich in both natural resources and skilled labor, and would thus not be hard to promote as a destination for international business ventures and tourism. —Joeberth M. Ocao/MEEV