John Hay firm kicks BCDA out of board, prepares suit

BAGUIO CITY—The developer of Camp John Hay kicked out two government officials sitting on its board of directors, as it prepared charges against the government for 11 years of lost profits.

On Monday, the Fil Estate-owned Camp John Hay Development Corp. (CJHDevco) decided to rescind a 2008 restructured lease agreement which granted shares to Bases Conversion and Development Authority in the firm, leading to the expulsion of BCDA vice president Dean Santiago and BCDA board member Elmar Gomez from the CJHDevco board.

Alfredo Yñiguez III, CJHDevco executive vice president and chief operating officer, said by withdrawing from the restructured lease, CJHDevco can invoke its original contract that allows the firm to seek arbitration and sue for damages against BCDA, which oversees the John Hay Special Economic Zone.

CJHDevco’s restructured memorandum of agreement  was drawn up in July 2008 to settle P2.4 million in debts dating back to 1997, according to CJHDevco records.

Yñiguez said the firm decided to hold payments again in 2009 allegedly due to government’s failure to set up “a fully functioning One-Stop Action Center (Osac),” which was supposed to process and issue all of the permits that CJHDevco required to enable it to proceed with its projects.

But government also failed to fulfill its contract in 1997, before the Asian currency crisis struck, and 2003 when the Supreme Court nullified John Hay’s tax incentives, Yñiguez said.

“When we were building the John Hay Suites, we had to wait for two years to get a building permit,” he said.

Last month, BCDA president Arnel Paciano Casanova issued CJHDevco a demand letter, directing the company to turn in all of its arrears which have grown to P2.6 billion, after fresh talks to settle the obligations failed.

CJHDevco had offered to pay P500 million in exchange for an Osac that could deliver all permits, including environmental documents.

BCDA chair Felicito Payumo described CJHDevco’s actions as an “alibi for not paying.”  Vincent Cabreza, Inquirer Northern Luzon, and Tonette Orejas, Inquirer Central Luzon