Iloilo ferry terminal complex deal questioned

ILOILO CITY—A P135-million joint venture project for the construction of a ferry terminal complex between the city government and a private developer is facing controversy over the alleged lack of competitive public bidding.

Alfonso Bedona, regional director of the Department of Budget and Management, said the legality of the agreement and contract could be challenged because it was based on a city ordinance that may be contrary to rules and procedures on projects provided by national laws.

“It must be proven that the agreement is the ‘most advantageous to the city’ and that there was transparency in awarding the contract,” he told the Philippine Daily Inquirer.

On Oct. 1, the city government, represented by Mayor Jed Patrick Mabilog, signed the 25-year deal with Double Dragon Properties Corp., represented by its president, Ferdinand Sia.

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

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

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

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

The city government will receive a portion of the earnings, including 1-5 percent of gross collections of terminal and berthing fees.

City legal officer Jose Junio Jacela said the contract was awarded to Double Dragon after it submitted an “unsolicited proposal” or a project proposal initiated by the private sector and presented to the local government unit (LGU).

Jacela said the joint venture selection committee decided to accept the proposal because it was the only one submitted after notices for comparative plans were published in a national newspaper and a local newspaper.

Two other firms that signified their intention to challenge Double Dragon failed to submit their proposals. These were First Metro Investment of the Metrobank Group and Sagraso Construction Co.

“That is akin to public bidding,” Jacela told the Inquirer.

Double Dragon failed to respond to requests for a statement sent through e-mail, phone calls and text messages to their corporate office. A legal counsel of the company also declined to issue any statement for lack of authority.

Unsolicited proposals should involve “a new concept or technology or a project that is not in the list of priority projects of the LGU,” according to Republic Act No. 7718 or the Philippine BOT Law and the “Developing PPP Projects for Local Government Units,” a manual published by the Public-Private Partnership Center.

Asked why the project was awarded through an unsolicited proposal when there was no apparent new concept or technology being introduced, Jacela said this requirement did not cover the agreement because it was based on the city ordinance on joint venture agreements.

Ordinance No. 2012-213 passed on May 2 allows the city government to use joint venture agreements with people’s organizations, nongovernment organizations and private entities.

Jacela said the ordinance was itself based on Section 35 of the Local Government Code (RA 7160), which deals with joint ventures or programs of the LGU. That provision covers partnership with people’s organizations and nongovernment organizations but is silent on private partners.