Olongapo SubicBay BatangGapo Newscenter

Wednesday, September 17, 2008

‘No sweetheart deal on Subic golf course’

By. Jonas Reyes - Manila Bulletin

SUBIC BAY FREEPORT -- The Subic Bay Metropolitan Authority (SBMA) vehemently denied allegations that it has entered into a sweetheart deal with Hanafil Golf and Tour Inc., a Korean-Filipino firm that is set to invest $ 48 million in the redevelopment of the Subic Bay golf course.

SBMA Administrator Armand Arreza said that the agency had observed due process in the awarding of the contract to Hanafil in accordance with Republic Act 9184, also known as the Government Procurement Reform Act.

"How could it be a sweetheart deal when clearly our agreement with Hanafil assures the government a P14-million income annually, compared to the P3.6-million promised by the former operator?" Arreza said.

The P-million rental will be paid on top of a five-percent, revenue-sharing arrangement as well as the $ 48-million development commitment, he said.

Arreza also said SBMA awarded the lease and development contract to Hanafil because the firm offered terms most advantageous to the government among the eight proposals received by the SBMA’s bids and awards committee (BAC) for infrastructure.

All these underwent the legal process starting with the publication of the invitation to submit comparative proposals to the creation of an oversight committee composed of SBMA directors and managers to oversee the bidding, Arreza said.

There is simply no basis of this "sweetheart deal" claim made by some detractors, he said.

Arreza was reacting to claims of Northern Samar Rep. Emil Ong that the terms and conditions of the Hanafil contract were grossly disadvantageous to the government because unlike the contract of the Universal International Group (UIG) which is the former operator, Hanafil was given a one-year grace period in the payment of rentals to allow the new operator to develop the golf course.

Arreza said SBMA has given the UIG more than enough leeway to enable it to comply with its development commitments made in 1995.

UIG’s commitments include the construction of a first-class clubhouse, a five-star hotel and resort, a condominium and VIP villas. These were targeted for completion before Subic hosted the Asia-Pacific Economic Cooperation Summit in 1996.

Arreza said that the SBMA had allowed UIG’s original lease and development agreement (LDA) to be amended three times, with the first amendment in 2001 effectively reducing UIG’s rental fees, performance bond and service fees, and extending the period for compliance of its commitments.

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