ILOILO City – The City Legal Office (CLO) has criticized the joint venture agreement (JVA) between the city government and a private company which operates the Iloilo Ferry Terminal, comparing it to a “garage sale” due to what it perceives as an undervaluation of city-owned assets.
In a supplemental letter to the company, City Legal Officer Edgardo Gil expressed dismay, stating that the city government, despite contributing prime real estate to the project, appears to be on the losing end of the agreement.
“The city contributed prime real estate to the project, and yet, glaringly, has been treated as a mere footnote in the transaction,” the letter read.
The CLO demanded that the city government be provided with the Master Development Plan (MDP) for the JVA within five days.
Failure to comply, the CLO warned, could lead to legal actions, including the rescission of the agreement.
Concerns highlighted by CLO
The city’s share of terminal revenues is limited to just 1% to 5%, compared to 95% to 99% for the developers. Gil argued that this is grossly inequitable given that the city contributed a 1.3-hectare prime parcel of land for the project.
“The city’s tiny share in the profits turns a blind eye to the extent of its contribution to the venture. This profit-sharing structure violates the principles of fairness and equity in public contractual arrangements,” Gil noted.
The JVA did not include a proper assessment of each party’s contributions, particularly the city’s.
Gil emphasized that without an accurate valuation of assets, there is no way to ensure a fair profit-sharing arrangement.
Since the JVA’s execution in 2012, the private company has failed to submit annual financial and operational reports to the city mayor, as required under Section 8.2 of the agreement.
This lack of compliance undermines transparency and accountability, the CLO argued, preventing the city from effectively monitoring the project’s performance.
The JVA authorized the company to operate the terminal, but the agreement also named Iloilo-Guimaras Ferry Terminal Corporation (IGFTC) as a developer, despite its lack of incorporation at the time.
The CLO raised legal concerns about IGFTC’s involvement and revenue-sharing.
The JVA grants the developers a 25-year operating period, with an option to extend for another 25 years, effectively giving them exclusive control over the terminal for 50 years.
This exclusivity, coupled with a prohibition on other transport terminals in the area, fosters a monopolistic setup, potentially affecting competition, service quality, and affordability.
The developers failed to submit the required MDP, which should have served as the project’s blueprint.
The lack of this document gives developers unchecked control over the project, the CLO argued.
The CLO demanded that representatives from private company DoubleDragon and IGFTC must meet with the City Hall lawyers to renegotiate the JVA’s terms and conditions.
The city lawyers also noted the developers must furnish the MDP and other relevant documents within five calendar days.
Failure to meet these demands will compel the CLO to take legal actions, including contract rescission or arbitration, in the interest of public accountability.
“This project is vital to the city, but the current arrangement is not reflective of a true partnership. It is imperative to rectify the agreement to protect the city’s interests and those of the Ilonggos,” the CLO stressed./PN
