COA oks Ayala-Negros Occ deal

 BACOLOD CITY, Philippines  — After 14 months, the Commission on Audit (COA) finally approved the contract between Ayala Land Inc. (ALI) and the Negros Occidental provincial government on the sale and lease of the 7.7-hectare prime property in this city.

The approval came three weeks after ALI “disengaged” from its proposed P6-billion development project due to alleged COA inaction on the approval of the deed of conditional sale and contract of lease for the property, which were submitted to the commission in July 2011.

In its 20-page resolution dated Sept. 21, 2012, a copy of which was distributed by Gov. Alfredo Marañon Jr. to the media Thursday (Oct. 4), COA stated that considering the favorable recommendations of the COA Audit Team Leader (ATL), the provincial government of Negros Occidental, the COA regional director in Western Visayas, the instant approval of the sale contract, dated April 26, 2012, is approved.

The contract states that ALI will buy from the provincial government 3.6587 hectares of land worth P750 million subject to an initial payment of 50 percent, with the balance to be paid on a quarterly basis over a one-year period.

On the lease contract, however, the request for approval was “remanded” to the ATL and the LGU “for contract review on post-audit basis,” the COA resolution further stated.

To be leased is 4.0481 hectares at P2,955,133 a month, with rent increasing at 10 percent every five years. Ayala will deposit P35,461, 356 covering one year rent, the contracts stated.

Assistant provincial legal officer Mary Ann Manayon-Lamis, head of the Capitol defense team in the case filed by SM Prime Holdings Inc against the provincial government, said LGU will earn from ALI P2.7 billion over the 50-year lease period, and P750 million from the sale package, or a total of P3.5 billion.

SM Prime Holdings, rival bidder to the property, is questioning before a Bacolod RTC the contract granted to ALI.

In the decision, COA said it does not find merit in the SMPHI’s contentions that it should have been declared the winner because its bid was much higher than ALI’s and that the Capitol’s Committee on Awards and Disposal of Real Properties failed to disclose the floor price.

The Sept. 21 resolution was penned by COA Commissioners Juanito Espino Jr. and Heidi Mendoza. COA chairperson Ma. Gracia Pulido-Tan had inhibited herself from the deliberations of the Commission Proper upon the request of the Negros Occidental LGU, said COA secretary Fortunata Rubico, in an addendum certification.

Marañon, in a press conference Thursday afternoon, said the COA decision was a “vindication” for him and the committee on awards and disposal of real properties, who were respondents in the case filed by SMPHI at the Bacolod RTC. It proved that the contract with ALI was legal, he said.

ALI senior vice president Emilio Tumbocon, wrote to Marañon last Sept. 13, for a disengagement from the project: “After more than a year since the property was awarded to ALI for development, we regret that we are unable to pursue the project on account of the delays and legal disputes that continue to threaten its implementation, though no fault of ALI.”

But now that it has been approved by COA, Marañon said, “We will try to convince Ayala Land to reconsider their letter of disengagement to the project,” otherwise the property will be re-bid to other developers.  (FREEMAN)