by Ernesto Hilario – February 23, 2015
BASES Conversion and Development Authority (BCDA) President Arnel Paciano Casanova recently claimed victory in the state-run agency’s longstanding legal dispute with its private partner Camp John Jay Development Corp. (CJHDevCo) after the arbitral tribunal of the Philippine Dispute Resolution Center Inc. (PDRCI) affirmed on Feb. 11 the rescission of the 1999 lease agreement between the BCDA and CJHDevCo.
According to the BCDA honcho, CJHDevCo should immediately vacate the CJH Special Economic Zone (CJHSEZ) it has been running for almost two decades in Baguio City–and for the locators to ignore CJHDevCo and to transact business only with the BCDA.
But is it really a victory for BCDA?
What the BCDA wants is to immediately take over the 247-hectare economic hub in Baguio City even before the PDRCI’s revocation of the lease accord could become final by way of a Writ of Execution to be issued by the appropriate court at the end of a transparent judicial process.
The projected BCDA move will be an example of reverse privatization that violates Republic Act 7227, or the Bases Conversion and Development Act of 1992, and undermine the law’s mandate for the BCDA to privatize former military camps to generate funds for the AFP modernization program.
Moreover, if the BCDA insists on ejecting CJHDevCo from the former American rest and recreation facility, the biggest losers would be, first of all, the armed forces because this would set back its modernization program. Second, the BCDA move send the wrong signal that the government’s PPP program is not working at all. And third, it would cause financial troubles for Baguio City, which wants to collect its overdue 25 percent share of all JHSEZ rentals paid to the government.
The PDRCI’s arbitral tribunal’s February 11 decision says the lessee (CJHDevCo) should return the estate to its lessor (BCDA), inclusive of all new constructions and permanent improvements that CJHDevCo had built on the property to the tune of P5 billion ever since securing its lease contract 19 years ago. But what the BCDA glosses over is part of the decision which says that the BCDA should refund in full to CJHDevCo a total of P1.42 billion in rentals it had paid since 1996. The PDRCI panel, although affirming the invalidation of the warring parties’ JHSEZ lease accord, threw out the BCDA claim that CJHDevCo owes the government P3.3 billion in overdue rentals.
There are 118 business enterprises like business process outsourcing firms, restaurants and retail shops along with 85 residential buildings owned by private sub-lessees at the CJHSEZ.
CJHDevCo Chairman Robert John Sobrepeña has expressed support for the PDRCI ruling:“We feel vindicated by the Arbitration Tribunal in upholding our position that CJHDevCo does not owe any P3.3 billion back rentals to the BCDA.”
At the same time, he assured CJHDevCo’s locators of continued protection as they acquired CJH sub-leases in good faith: “We assure our buyers, locators and sub-lessees that their rights to the properties they acquired and are now using in John Hay will continue to be protected and respected.”
Sobrepeña said the BCDA should sustain CJHDevCo’s vision for the JHSEZ to become the “leading eco-tourism destination in Northern Luzon” and continue nurturing the almost half-million pine trees that CJHDevCo has taken good care of in the course of its almost two-decade stewardship.
“When we turn over the Camp to BCDA after the P1.42 billion award is paid to us, BCDA will take care of the 480,000 trees we will leave behind. When we took over the Camp in 1996, there were 250,000 trees in the Camp. During our stewardship of the Camp, we planted 230,000 more trees. Thus, when we eventually turn over Camp John Hay to BCDA, the Camp would be in perfect environmental condition.”
In conclusion, Sobrepeña said: “It has always been our position that the trees in John Hay are the Camp’s most treasured assets. The pine trees are what have set John Hay unique among other destinations. The presence of these trees posed the greatest challenge to our development plans as we believed these trees should not be cut.”