Palace laments gov’t losses due to UP-Ayala Technohub deal

The national government is suffering losses due to property developer Ayala Land Inc.'s measly payment to the University of the Philippines (UP) for the rental of Technohub property in Diliman, Quezon City, MalacaAang said on Tuesday.

Presidential Spokesperson Salvador Panelo made the statement, as he revealed that Ayala Land has been paying only PHP20 per square meter in monthly rentals to the UP, a state university.

Definitely lugi. Lugi ang gobyerno dito (The government is definitely incurring losses here), the Palace official said in an interview, referring to the lease deal between Ayala Land and UP.

Can you imagine, PHP20 less per square meter, I've been told by many businessmen, eh sila nga daw (they are paying) PHP500 per square meter, ang iba, PHP200 per square meter, he added.

In 2006, Ayala Land entered into a 25-year lease agreement with UP to develop and convert the 37-hectare land along Commonwealth Avenue in Diliman, Quezon City into a commercial lot.

The Ayala group has earned President Rodrigo Duterte's ire after its subsidiary, Manila Water, allegedly had an onerous water concession agreement with the national government.

'Another rip-off'

Panelo said the Palace would review the lease pact because there was apparently something wrong with the government's existing deal with Ayala Land.

He also considered the lease deal as another rip-off.

Titingnan natin kung totoo 'yun (Let's see if it's true). You have to look at the contract, the Palace official said. If this is true there must be something wrong with it. So we'll study it if this is true or not.

In a statement, Ayala Land welcomed a transparent review and assessment of its lease contract with the UP.

Ayala Land also debunked Panelo's claim, saying that the effective lease rate paid to UP is actually PHP171 per square meter.

It also noted that UP, in return, will earn a total of PHP10.23 billion under the 25-year lease contract -- PHP4.23 billion in lease payments and PHP6 billion in investments for the development of 16 commercial buildings.

Panelo said the property developer's statement would be considered and relayed to the President.

But he stressed that he might ask the President to also look into the lease agreement, which might also put the government at a disadvantage.

I will recommend to the President, if this is true on the basis of a study and on the basis of their admission that only PHP10.4 billion will be taken by the government, UP at the end of 25 years, then I will recommend to the President, pag-aralan natin ito, mukhang kawawa na naman ang gobyerno dito (to review the deal as the government might once again suffer), Panelo said.

On Friday, Duterte said he would review the state-run Light Rail Transit Authority's existing contract with the Light Rail Manila Corporation (LRMC) after he learned that Fernando Zobel de Ayala and Manuel V. Pangilinan also have key roles in its operations.

Ayala and Pangilinan respectively chair the Manila Water and Maynilad, the two water firms that have been in hot water due to their alleged onerous concession deals with the government.

Meantime, the LRMC is a consortium of the Ayala-led AC Infrastructure Holdings Corp., Pangilinan-owned Metro Pacific Investments Corp., and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.

The President, in his speech in Davao City on Friday night, pledged to go after Ayala and Pangilinan because they have had enough.

The national government's supposed onerous deals with Manila Water and Maynilad have prompted Duterte to order the review of numerous existing government contracts with private firms that may be found disadvantageous to the country.

Source: Philippines News Agency

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