PCGG-controlled firm clarifies Pasig land lease

A Presidential Commission on Good Government (PCGG) controlled company admitted that it leased more than eight, not four, hectares of government-owned choice real estate in Pasig City last year to three groups.

Ernesto Jalandoni, president and chief executive officer of Independent Realty Corp. (IRC), said that before leasing portions of the 18-hectare "Payanig sa Pasig" property in the Ortigas business district, they had advertised for interested parties to lease the land in the latter part of 2002, but got a dearth of offers due to complications in the condition of the property.

However, Jalandoni said that they were still able to get "acceptable" offers from three groups that ended with the lease of portions of the property.

Jalandoni said that one group leased around 1.6 hectares of the property for P40 per square meter a month in certain portions and P60 per square meter a month in other portions for three and a half years, starting March 2003.

One group, a printing company, leased more than 2.3 hectares for P150 per square meter a month for four years, starting May 2003.

Another group, a Construction company, leased more than 3.8 hectares for P70 per square meter a month for four years.

Jalandoni defended the relatively low lease rates by saying that only a few groups were seriously interested in actually leasing the land in view of the squatter problem previously existing in major portions of the property.

He said they were only able to drive out the squatters in the property after so much effort in January 2003. To keep the squatters from coming back, they had to hire 50 security guards, which entailed a lot of money, Jalandoni pointed out.

Also, he stressed that the uncertainty of the duration of the lease and the fact that it was a sequestered property that could be sold anytime by the government through the PCGG also discouraged parties from leasing portions of the property.

"There had been squatters in a big portion of the property. It was also known to be a Marcos property. Only a few were really intent on leasing it," Jalandoni told The Star.

He said that in offering portions of the property for lease, they insisted on a "strict" privatization clause in the lease contract which stipulates that the government can immediately cancel the lease contract if it wants to privatize or sell the entire property.

The PCGG placed the fair market value of the entire 18 hectares at P18.5 billion, based on 1998 estimates.

Jalandoni said the insertion of the privatization clause in the lease contracts ensures that the government can sell the entire property anytime.

He said the PCGG knew and approved of the three lease agreements.