Council questions Mike’s acceptance of lot payments

CEBU, Philippines - Did the Cebu City government breach the law when it received payments from a winning bidder without authority from the City Council?

The members of the council questioned yesterday the position of the executive department in the receipt of payments from Hotel of Asia, considering that they did not grant Mayor Michael Rama the authority to sign the deed of sale and deed of conditional sale between the winning bidder.

The council called for an executive session Tuesday on the controversial prime commercial lot 917 located in Barangay Lahug.

The 2,357 square meter lot, located along Salinas Drive across Cebu I.T. Park, was awarded to Hotel of Asia Incorporated after it posted the winning bid of P35,000 per square meter December last year. The amount is P500 higher than the floor price set by the City Committee on Awards.

Hotel of Asia then paid the city a partial amount of P46.09 million on January 10, representing 50 percent of the total cost of the property, which can only be utilized for hotel, condominium and office spaces.

City Legal Officer Jerone Castillo backed the receipt of payment, saying it was based on the notice of award released to Hotel of Asia on December 18, 2013.

Based on the terms and conditions of bid, the winning bidder shall pay an initial payment of 50 percent once the award is given, inclusive of 10 percent of bidder’s bond, while the remaining 50 percent balance shall be payable upon transfer of the land title within 60 days.

“Upon the notice of award not even a conditional sale, there must be a payment of the 50 percent inclusive of the 10 percent of the bond,” he said.

City Treasurer Diwa Cuevas confirmed receiving the amount, which was deposited to the 2014 Annual Budget.

Councilor Margarita Osmeña asked, “Why keep the money?”

“There is no legal basis to receive the payment since we did not approve any contract. Why are we keeping the money that is not ours?” she added.

But Castillo has defended the receipt of the amount.

“Our position is, there is no harm for the city to receive the amount as it can be returned anytime if there is a request and there is no basis to repay the amount,” Castillo said.

As per the condition set in the sale, any development would start two years from the transfer of the land title, which hit a snag after Waterfront Cebu City Hotel and Casino, which wanted to purchase the property, contested the disposal of the lot.

Cuevas, however, said the transfer also did not push through after the Waterfront management, through lawyer Edmund Villanueva, asked the court to issue a TRO to stop the consummation of the sale of Lot No. 917, which is adjacent to Waterfront. The hotel’s management has long been interested in the property.

However, the court last April denied WCCHC petition after seeing that “there was no extreme urgency for the court to issue the same.”— (FREEMAN)