January 25, 2016
BCDA Loses Almost P5 Billion For Philippine Government
The mandate of the Bases Conversion & Development Authority (BCDA) is to “transform former US military bases into alternative productive civilian use” and thereby contribute to the modernization of the Armed Forces of the Philippines (AFP).
Unfortunately, instead of raising funds for the benefit of the AFP, the BCDA has lost almost P5 Billion of what could have become funds to help improve the AFP because of the refusal of its President Arnel Casanova to negotiate properly with the private developer of Camp John Hay.
Casanova had gained press in the past couple of years by announcing that the BCDA had joined the Billionaires’ Club of Government Owned and Controlled Corporations when BCDA announced that it had remitted P100 million worth of additional cash dividends to the Bureau of Treasury. BCDA proudly declared that this is on top of the P400 Million cash dividends and the P1.707 Billion representing the share of government agencies from BCDA’s Asset Disposition Program already remitted to the National Treasury in June 2014.
The truth is, in 2015, BCDA lost over P3 Billion for the Philippine government. Due to the refusal (not constant failure, but the outright refusal) of Casanova to properly negotiate with the private developer of Camp John Hay (letters were ignored and did not even have benefit of a reply, according to the private developer), he caused Camp John Hay Development Corp (CJHDC), the developer of Camp John Hay, to file a case against BCDA with the Philippine Dispute Resolution Center. The dispute was resolved in 2015 and Casanova lost receivables for the government.
During the arbitration hearings, Casanova attempted to coerce CJHDC to cough up P3.4 Billion even as BCDA refused to give the developer permits to develop the property. Letters from the developer to BCDA were unprofessionally left unanswered; instead, Casanova started a media war against the developer and its officers.
Casanova was insisting before the Arbitral Tribunal on making CJHDC pay for lease to the tune of P3.4 Billion even if they were being prevented by BCDA themselves from developing the land by refusing to issue necessary permits. BCDA, in fact ,listed this amount as an Account Receivable from CJHDC.
In February 2015, however, the PDRCI issued a decision that called it quits for the BCDA and CJHDC. It ordered the contract rescinded and for the developer to return the property to BCDA. Casanova might play this out as a victory but he was really the biggest loser in this case for the following reasons:
BCDA OWES CAMP JOHN HAY DEVCO
The return of the property (Camp John Hay) can only be done after BCDA pays back CJHDC P1.42 Billion. This amount represents lease rentals that CJHDC had paid BCDA but must be returned because, as the arbitration court ruled, BCDA reneged on their obligation to deliver the property and give necessary permits for its development.
Casanova went to town insisting that CJHDC must already return the property to BCDA but he has conveniently erased the much required factor of P1.42 Billion that he just lost for the government and needs to withdraw from government coffers to pay CJHDC.
On top of the P1.42 Billion, the court also ruled that BCDA is NOT entitled to the P3.4 Billion of what Casanova termed as “unpaid rentals” .
The danger here is that BCDA under Casanova had listed P3.2 Billion (that Casanova bloated to P3.4 later) as an Account Receivable (revenue earned but not yet collected) in their balance sheet in their 2012 Annual Report. In the 2012 Annual Report of BCDA, the following are listed: Revenues, P3.216 Billion; Expenses (negative) P1.988 Billion; Net Income Before Tax, P5.203 Billion.
Now that the Arbitral Tribunal has ruled that in fact this P3.2 Billion is NOT due to BCDA—in other words, the amount that Casanova claimed to be unpaid rent is IN FACT NOT DUE—what it had earlier declared as Account Receivable must now be declared a LOSS.
Therefore, for the year 2015, BCDA must put in their books a LOSS of P3.2 Billion.
Almost P5 Billion Lost
Casanova in fact did not lose only P3.2 Billion for the government but a total of P4.62 Billion. He lost an additional P1.42 Billion when BCDA was ordered to return all the rental payments made by CJHDC.
Over and above that, BCDA was deemed liable to pay interest on the rental payments made by CJHDC. However, the PDRCI Arbitral Tribunal ruled that instead of BCDA paying interest to CJHDC, CJHDC will get to keep all the revenues that CJHDC received during the time CJHDC was in Camp John Hay. It is for this reason that all the 3rd party buyers and investors are now entitled to keep their investments in CJH.
Insiders say that Casanova has been hard on Camp John Hay DevCo because he has a grudge against CJHDC Chairman Bob Sobrepeña. But the AFP and the people don’t care about Casanova’s hard feelings against the John Hay developer. P5 Billion is too much to lose just to assuage Casanova’s bias against Sobrepeña, don’t you think? What a waste.
Photo/s used in this post is/are covered under the Fair Use Exemption of the IP Code.
- You acknowledge that Manila Speak is only a platform for your views and opinions and those views and opinions of yours are not necessarily that of Manila Speak.
- The comments section is a public forum and you will be considerate and respectful at all times.
- You shall not post any defamatory utterances, profanity or vulgar language, anything that is obscene or abusive. You shall not post any false statements, harassing words or threaten a person’s safety or property.
- You shall not, without consent, post any personal information such as but not limited to phone numbers and email or mailing addresses.
- You shall not violate other’s intellectual property or proprietary rights.
- Manila Speak may or may not review your post but it reserves the right to remove that same if such post may potentially violate the guidelines.
- All Rights Reserved. No portion of this site may be republished without permission of the publisher.