Subic Construction Boom

GOTCHA By JARIUS BONDOC

SUBIC FREEPORT — Tourists see only the beaches, duty-free shops and jungle theme parks. But behind all the fun sites of this economic zone straddling Bataan and Zambales is a construction boom of condominium-hotels.

The Philippine Star

SUBIC FREEPORT - Tourists see only the beaches, duty-free shops and jungle theme parks. But behind all the fun sites of this economic zone straddling Bataan and Zambales is a construction boom of condominium-hotels.

Three big projects are rising all at once. Work began Nov. for a 150-room resort hotel at the 2.5-hectare MG Dream Village inside Subic Bay Industrial Park. Last weekend saw groundbreaking for the first of five 17-storey condos of Ampelos Tower on a 1.4-hectare lot at Subic Commercial and Light Industrial Park. Shipbuilder Hanjin Corp. is erecting its own condotel on a 3-hectare corner of the Ilanin Forest East.

All the construction is new money from Korea, and aim for Korean customers. The P500-million Dream Village, with health spas, golf driving range, swimming pools and resto-bars, recognizes Subic as the most visited spot of Korean tourists, says MG chairman Chang Young Ryu. Hong Shik Kim of KT Global that is behind the P150-million Ampelos Tower hopes to cash in on the high-end market. Hanjin’s P37-million condotel is for full shipyard operations by 2010, when the firm would be utilizing hundreds of Koreans among 30,000 staff and consultants. Subic Authority administrator Armand Arreza foresees more Koreans than ever touring the former US naval base that now hosts Korean restaurants, several smaller hotels, and a church.

Authority chairman Feliciano Salonga, concentrating meanwhile on the industrial side, says Hanjin’s shipyard is attracting more investments. Hanjin has booked $3 billion in orders since it plunked in $1 billion for a shipbuilding factory 14 months ago and dry-ran its facilities in March. The firm has opened a P240-million training school and is applying to expand its facility for another $1 billion.

Subic’s only downside, though, is that it continues to be a smuggling zone for politicians.

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CLARK FIELD — Authorities here finally are restoring a long-derelict hillside resort for potential billion-peso incomes from land lease. But as in most public biddings of its size, there are questions about the award.

Clark Leisure Hills, on 346 hectares of rolling terrain, is a promising tourist site. With its size, it can contain a mixed resort with full golf courses and sports arenas, spas and clinics, hotels and casinos, entertainment and dining outlets, shopping malls and theme parks, and other fun facilities.

That it has remained idle for years is a waste. The original lessee had abandoned it, failing to build yet running away with cash from golf shares sold to hopeful players. Ironing out the legal kinks, Clark Development Corp. president Liberato Laus put up the area for long-term lease of 50 years. Along with the full operation of the Macapagal Airport (what used to be the US Military Air Command), the private development of Clark Leisure Hills is top priority since Laus took over a year ago. Once operational in two to three years, the giant resort can attract more tourists into Clark’s other resorts and outlets, including the government’s rotting Centennial Expo.

There’s a new kink, though. CDC is being accused of rigging the bid.

Documents from insiders tell the story. Five qualified bidders were supposed to "submit a monthly lease (Option 1) and converted into lump-sum payment (Option 2) by computing the present value", given 50 years and CDC’s assumptions. Highest bid naturally wins.

Only one bidder, however, followed the prescribed bidding format of quoting a monthly lease then adding it up as lump sum. Two had only monthly offers but no lump sums; one had no monthly price but gave a lump sum. The last had both monthly and lump sum figures, but these did not tally. Its monthly offer looked superior at first glance, but its lump sum was $10 million lower than the first bidder’s $17.5 million. Using its lump sum as basis, its monthly offer in effect was the lowest of the five. Still, the CDC awarded the contract to this last bidder.

Laus denies any wrongdoing. He recounts that the bidding last May was open to public: a gallery was designated for viewers and proceedings were videotaped. "Whoever is complaining does not understand the rules," he says, "or maybe a sour grape."

Laus says the winner had offered $130,000-monthly rent — "that’s 78 percent higher than the second best and 500 percent higher than the fifth." The lump sum was indeed only $7.5 million, he acknowledges, "but that’s up-front money" separate from the monthly payment.

Apparently there were at least two — perhaps more — interpretations of the bidding rules. Lump sum was taken to mean by some as adding up the monthly rental along with escalation and discounts; Laus understood it as down payment. The confusion could be grounds for new bidding.

Laus says he has received no formal complaint about the deal, apart from press insinuations of sham. "Before and after the sealed bids were opened, we asked them if they had any comments or questions, and there were none," he recalls. "We did things right, that’s why they are raising these issues through the media, not with us."