Go on, says Council

THE Cebu City Council authorized Mayor Michael Rama to sign a joint venture agreement for the construction of the P27.9-billion Cebu-Cordova bridge.

They also approved the terms and conditions of the joint venture, which means that the Metro Pacific Tollways Development Corp. (MPTDC) can start complying with several requirements for the project.

“We are happy that the council finally approved the agreement and authorized the mayor to sign it because we have a deadline to comply with, which is quite tight,” said MPTDC President Rodrigo Franco.

The project proponent only has one year from the issuance of the notice of award to comply with all the requirements before the project can be implemented. That period will lapse on Dec. 23 this year.

Among the requirements is the approval of the Toll Regulatory Board, the Philippine Reclamation Authority, Department of Public Works and Highways, Department of Environment and Natural Resources, Civil Aviation Authority of the Philippines, Philippine Coast Guard, and the Philippine Ports Authority.

The council gave Rama the authority to sign the joint venture agreement (JVA), following an executive session with MPTDC officials last Wednesday.

9 months

That came exactly two weeks after the firm appealed to the council to approve the agreement before the May 9 elections, so they can meet their deadline. Cordova had approved the JVA last Feb. 18.

Franco is optimistic that they will secure all approvals from the concerned government agencies, although there are only nine months left before their deadline.

“That optimism is, of course, anchored on the fact that we have a really good project. No agency would go against the project because it is for the benefit of the city and other localities,” he added.

Prior to their approval, Atty. Aristotle Batuhan, legal consultant of Metro Pacific Tollways Corp., which owns MPTDC, assured the council that the City Government will not have to shell out money for the project implementation.

What are the City’s obligations as a partner for the project, asked Councilor Margarita Osmeña.

Batuhan said that under the JVA, the resources of the City as well as that of the Cordova will be its contribution, particularly the public lands that will be used for the bridge.

Relocation

Councilor Alvin Arcilla then inquired if they have already identified what public lands will be used.

Batuhan said that a survey is still ongoing, but the initial results showed that no City-owned property will be affected.

Batuhan went on to say, though, that it will be the City’s obligation to clear the riverbanks of Guadalupe River, starting at its mouth near the Cebu South Coastal Road, since it is where one of the ramps for the bridge will be constructed.

This prompted Councilor Lea Japson to ask who will pay for the relocation and disturbance fees of the families that will be affected.

City Administrator Lucelle Mercado said that it will be the City who will shoulder that cost.

“We will be the ones responsible for it because we have to remember that whether there is this project or not, we are still mandated to transfer these people because of the risk of where they are staying now. They are living within the three-meter easement of the river, which is a danger zone,” she said.

Not free

Mercado, who attended the executive session as head of the City’s joint venture selection committee, said those costs will be charged to the annual budget.

Batuhan informed the council that the MTPDC had offered to pay the City in advance its share of the projected bridge revenue, to cover the cost of relocating the affected familie.

But if that’s the case, Osmeña said it would mean that the project is not “cost-free” on the City’s part.

Mercado said that the City will just be using the usual budget for it.

Councilor Noel Wenceslao asked how much will be the City’s share once the toll facility becomes operational.

Batuhan answered that Cebu City and Cordova, being a “top line sharer,” will each receive one percent of the gross revenue.

Initially, MPTDC’s proposal was to make the two local government units (LGU) shareholders of the joint venture project with five percent (2.5 percent each) as dividends.

Immediate

But Batuhan said both Cordova and Cebu City wanted to avoid the complications of being shareholders.

“The advantage, if I may stress, is that in being a top line sharer, the LGUs will get the one percent share in the first year of operations. As shareholders, it would have taken at least five years before the project would have a net revenue. The 2.5 percent dividend for each LGU would have started only in the fifth year,” he said.

The concession period for the bridge project will last for 35 years, and will start with the construction period.

The proponents are targeting to start building the bridge by next year. It will be finished after 36 months, if everything goes on schedule.

Asked by Vice Mayor Edgardo Labella what will happen after the 35-year period, Batuhan said the toll facility will be turned over to the local governments.

On when the JVA will be signed by the mayor, Franco said they are still finalizing the schedule.

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