THE firm chosen to build a P16.4-billion international container port in Tayud, Consolacion had partnered with a Chinese firm whose parent company the World Bank (WB) has banned for fraudulent practices.
Officials of the Consolacion Municipal Government, however, remain confident in Mega Harbour Port and Development Inc.’s capacity to implement the project, given their track record in port development.
In an interview with Sun.Star Cebu yesterday, Municipal Legal Officer Atty. Paolo Crispin Sucalit said due diligence was observed before Mayor Teresa Alegado entered into a joint venture agreement (JVA) with Mega Harbour.
“We went through all the processes,” he said. It took the local government more than a year to scrutinize the unsolicited proposal.
It turns out that Mega Harbour partnered with China Communications Construction Co. (CCCC) Dredging for the development of the new international port, a deal that was announced after President Rodrigo Duterte’s visit to China last week.
CCCC Dredging, reportedly the largest dredging company in the world, is a subsidiary of CCCC Ltd., which the World Bank has barred for eight years beginning Jan. 12, 2009. The sanction was implemented starting in 2011.
The debarment means that CCCC and its subsidiaries cannot handle projects financed by the WB Group, but they are free to access other funding for separate contracts.
The ban will end in January 2017.
85 hectares
Sucalit said he just learned about this recently from media reports. He said, though, that town officials have scrutinized all the documents of Mega Harbour according to their Public-Private Partnership Ordinance.
He said Mega Harbour is entirely separate from CCCC.
A background check was conducted, he said, and they found out Mega Harbour is a subsidiary of a local firm, R2 Builders.
It was in the middle of 2015 when Consolacion received the unsolicited proposal of Mega Harbour.
In October last year, Mayor Alegado issued a certificate of acceptance.
By December, the Municipal Council passed a resolution endorsing the 85-hectare reclamation project also known as the Cebu International Container and Bulk Terminal Project.
Mega Harbour’s proposal was then subjected to a Swiss challenge sometime in February this year.
No other developer submitted a comparative proposal.
An ordinance was later passed authorizing Alegado to sign the JVA with Mega Harbour.
Private
Both parties signed the agreement in September this year.
Sucalit said the issue of CCCC with WB is not related to the construction of the international port in Consolacion.
“It refers to WB-funded projects man gud. Aid siya or utang. But ang atoa diri, wa man ni utang. Kung naa man gani risgo ana, ang Mega Harbour ang mag-problema. Private entity man ang mogasto ani. Way cash up ang gobyerno. Kung naa’y magbinuang, sila’y madaot (The debarment refers to World Bank-funded projects, either through aid or loan. Our project will involve no loan. If there’s any risk, it’s on Mega Harbour’s part. The private entity will pay for this project. No cash will be required of the government. Any anomaly will harm the private partner),” he said.
Sucalit emphasized that the cost of implementing the international port will be shouldered entirely by Mega Harbour.
Under the JVA, the Municipal Government’s obligation is to help Mega Harbour secure approval for the project from different government agencies. These include the Cebu Port Authority, the Philippine Reclamation Project, the National Economic and Development Authority and the Department of Environment and Natural Resources, among others.
Track record
The cost of acquiring the lots that will be affected by the project, he said, will also be shouldered by Mega Harbour. The Municipal Government will only help in negotiating with landowners.
Former municipal legal officer Atty. Christian Bacus, who handled Mega Harbour’s proposal before he resigned, said that town officials have visited several projects undertaken by the firm, like the Manila Harbor.
“We are aware that Mega Harbour has been in existence for several years. They have existing infrastructure projects that are functioning. They are not a new entity. We have not heard any issues on the harbors they are operating,” he told Sun.Star Cebu.
Before he assumed the presidency, Bacus said, Duterte had signed a memorandum of agreement with Mega Harbour for a 200-hectare port project in Davao City.
“What would really generate fear is if they are a fly-by-night company but they are not. Naa man gyud siya’y agi. Naa siya’y record ba. We are confident nga kaya nila (They have a track record. We are confident they can do this),” he said.
Bacus believes that Consolacion is dealing only with Mega Harbour, and is not privy to whether or not other private investors are involved.
Safety nets
If any of the parties will not fulfill any of their obligations for the project, Sucalit said, safety nets are provided for under the JVA.
One states that Consolacion has the right to continue the project on its own with another developer if Mega Harbour cannot continue with the project or suffers from unnecessary delays.
Any aggrieved party also has the option to file a case.
Bacus lamented, though, that so much has already been said about the project when it is still on its first phase yet.
Sucalit said that town officials are backing the project as it will have economic benefits for their municipality.
That includes additional business and real property taxes and more job opportunities for residents.
Out of the 85 hectares that will be reclaimed for the project, Sucalit said 30 hectares will be allocated for the international port, while the 55 hectares will be an industrial area. Of that, nine hectares will be given to Consolacion.
As to how the government will develop it, Sucalit said it will be up to the mayor to decide.
Following the signing of the JVA last month, Sucalit said the Municipal Government together with Mega Harbour will go to CPA to seek approval for the project.
Cebu port
But CPA earlier said that Consolacion can’t push through with it since it is only the CPA that has the power to construct and operate all ports. They also said they have plans of constructing a new international port in Tayud, the same barangay where Mega Harbour’s project has been proposed.
To resolve their issues, Sucalit said they will talk with CPA.
He said they did not meet with CPA before since they didn’t have the legal personality yet in relation to the project, not until they signed the JVA with Mega Harbour.
Bacus, for his part, said he is surprised by the CPA’s stand on the project now since it was former CPA general manager Dennis Villamor who introduced Mega Harbour to them.
Sucalit said they only learned of CPA’s separate plan to build an international port last August.
Mega Harbour’s representatives will be in town next week and Sucalit said they will determine when they can meet with CPA.
Asked when the construction of the new facility will start, Sucalit said it will begin once Mega Harbour gets all the necessary approvals and permits from different government agencies.
