Solon says John Hay talks a failure

BAGUIO CITY—An initiative by Congress to mediate the debt standoff between the developer and administrator of Camp John Hay has failed, Baguio Representative Bernardo Vergara said on Tuesday.

Vergara was tasked in March by the House of Representatives’ special committee on bases conversion to determine the reason for the conflict between the Bases Conversion and Development Authority (BCDA) and the Camp John Hay Development Corp. (CJHDevco) over the developer’s unpaid rentals.

Vergara said he was also directed to broker peace between them.

“I will have to report back on May 7 that our efforts failed. BCDA does not want conditions attached to its demand that CJHDevco pay all of its debts. What happens after they pay? Will they be allowed to stay? CJHDevco, on the other hand, wants another restructured lease agreement,” Vergara said.

Since January, both BCDA and CJHDevco have traded statements in media and have sued each other because of the developer’s decision to suspend payments, nullify its contract and pursue arbitration in order to settle whether it still owed the government.

Kalinga Representative Manuel Agyao, chair of the House bases conversion committee, asked Vergara and Benguet Rep. Ronald Cosalan on March 14 to form a technical working group (TWG) and determine the roots of the dispute.

Before convening the TWG, Vergara said he consulted BCDA, CJHDevco and city officials to determine if mediation would suffice.

“I was trying to offer a win-win solution where both parties benefit, and Baguio is not shortchanged, because the city’s share from the Camp John Hay rent would be frozen if the dispute is settled in court,” he said.

BCDA had ordered CJHDevco to pay P3.2 billion in outstanding rent payments, from which Baguio is entitled a 25-percent share.

Vergara, however, said BCDA and CJHDevco were firm on their respective positions.

Lawyer Arnel Paciano Casanova, BCDA president, said he was surprised about Vergara’s statements.

He said the TWG was intended as “a fact finding committee in aid of legislation and not a mediating body.”

“We have asked the congressional committee to subpoena all the financial records of all companies, including CJHDevco, and to [do] an independent audit,” Casanova said in a text message.

Alfredo Yñiguez III, CJHDevco executive vice president and chief operating officer, said he has not been informed about Vergara’s statements on the dispute. He said the developer is still waiting for the TWG to convene.

Vergara said the dispute has become complicated due to several issues that developed since last year.

In December last year, CJHDevco rescinded a 2008 restructuring memorandum of agreement—the third renegotiated lease deal—owing to alleged government breaches of that contract. The developer submitted a complaint against BCDA at the Philippine Dispute Settlement Center, where it sought damages worth P14.44 billion.

In February, CJHDevco acquired a temporary restraining order from a court here to prevent BCDA from taking over the former American rest and recreation center.

The developer later complained to the Office of the Ombudsman about BCDA’s decision to close its subsidiary firm’s water-refilling operation. Vincent Cabreza, Inquirer Northern Luzon