Iloilo ferry terminal plan in peril

ILOILO CITY—The city council withdrew its approval of a P135-million ferry terminal project here, threatening to derail the project, which councilors described as disadvantageous to the city government.

In a resolution passed on Wednesday, the council also withdrew the authority it granted Mayor Jed Patrick Mabilog on Sept. 19, 2012, to enter into a contract with the project proponent, Double Dragon Properties Inc.

“We believe that the contract, upon closer scrutiny, is disadvantageous to the government and the public,” said Councilor Perla Zulueta.

In a statement, Double Dragon insisted that the project would benefit the city.

“The share of the city in revenue is standard, reasonable and proportionate to the investment it made and the risks it assumed in the ferry-terminal project,” said the company’s legal counsel, Joselito Barrera Jr., in the statement.

The company said the city will also earn revenue in business taxes and that the project will spur the development of Iloilo and Guimaras.

Barrera said the project complied with all legal requirements and procedures.

The Iloilo City government, represented by Mabilog, on Oct. 1, 2012, signed a 25-year joint venture agreement with Double Dragon, represented by Ferdinand Sia.

Double Dragon is a joint venture between Injap Investments Inc., headed by Edgar Sia II, founder of the Mang Inasal food chain, and Honeystar Holdings Corp., headed by Tony Tan Caktiong, founder and chair of Jollibee Foods Corp.

The project seeks to improve passenger and cargo facilities, and services for commuters and tourists traveling between Iloilo and Guimaras.

Under the agreement, which is open for extension, Double Dragon will finance, construct and operate the ferry terminal on a 1.3-hectare government land near the port of Iloilo. The terminal complex will be turned over to the city government after the expiration of the agreement.

The agreement grants exclusive rights to Double Dragon to collect terminal fees amounting to P11 per passenger, berthing fees (P30 per day per boat) and cargo fees. The developer can also sublease or rent out commercial spaces within the terminal complex.

Critics of the project said the agreement contained onerous provisions that favored only the contractor.

Zulueta, who delivered a privilege speech against the project, said she found unacceptable the revenue sharing arrangement on terminal and berthing fees.

The contract stipulates a sharing scheme that is favorable to Double Dragon. It states that Double Dragon will get 95 to 99 percent of gross revenue while the city gets only 1 to 5 percent.

She said under the contract, the city could get P208,868 annually, or P16,730 per month.

“The developer can earn millions of pesos by renting mall space in the 1.3-hectare property and the government gets only this?” Zulueta said.

The Public Private Partnership (PPP) Center early this year directed the city government to review the contract.

“We wrote to Mayor Jed Mabilog to review the revenue model and the basis of the revenue sharing scheme to ensure that [the contract] is not unfair to the government,” said PPP Center executive director Cosette Vargas-Canilao.