CLARK FREEPORT – The Kuwaiti investor in this freeport’s flagship Global Gateways Logistics City (GGLC) occupying 177 hectares of land here has pulled out its finances from the access of its developer, rendering hundreds jobless and current projects, including the Medical City, uncertain.
Developer Peregrine Development International, Inc. (Peregrine) vice president for sales and marketing Jeff Stewart Pradhan said an initial 180 employees were laid off yesterday amid lack of funds for their salaries.
This, after the KGL Group, a firm owned by a Kuwaiti family and operates here through the Global Gateway Global Corp. (GGGC), withdrew its funds from a working capital account (WCA) from which Peregrine draws funds for its operations.
When ex-Pres. Arroyo inaugurated the logistics city project in 2008 after the entry of the KGL group, she described it as a fl agship project that would initially cost $1.25 billion. In 2005, Peregrine was the initial investor at the 167-hectare land within the boundaries of the Clark International Airport Corp. (CIAC) to which it pays land lease.
In 2008, it turned over to the Kuwaiti investor, through GGGC, the lease agreement, as it assumed role as manager and developer of the supposed logistics city for 50 years as specifi ed in their contract. “It was a turnkey opportunity in exchange for zero equity for us,” Pradhan said.
With funds supposed to be provided by the Kuwaiti investor for roads, buildings, and other facilities, Peregrine forged contract with investors, including Medical City whose ground-breaking was attended by Pres. Aquino in December 2010.
“The building for Medical City is only 90 percent finished and work on it has stopped. Work on roads have also been halted,” Pradhan said, noting that only 30 percent of the roads that were supposed to be funded by the Kuwaiti investor have been completed.
He noted that Medical City has already transported to the building a special $2.1- million MRI equipment that has to be kept in a special temperature-controlled room. Maintenance cost for this was at P1.5 million monthly.
Pradhan noted that KGL Group was supposed to complete the roads, drainages, power and water utility infrastructure in three years, on top of buildings, but it has failed on this. Dakila Maniquis, Peregrine chief investment offi cer, said that the logistics city project has remained “idle for the past six years because of inadequate funding by the Kuwaiti investors.”
He noted that the Kuwaiti investors had promised to create at least 200,000 jobs, but that this hasn’t materialized.
Maniquis said that the KGL Group has claimed that it has sold 51 percent of the logistics city project to another party which it has refused to identify. “The urgent concern now is the employment of the initial 180 out of 269 workers.
With the funds withdrawn by the Kuwaiti group, it is likely that other workers will have to go in three months,” he lamented. Maniquis stressed, however, that the Kuwaiti Group “is not leaving Clark. “Apparently, it just wants Peregrine out of the project.”
He said Peregrine has brought the issue before Clark Develoment Corp. President Arthur Tugade who said he would not intervene as the case was between two private parties. Maniquis said that the issue remains pending for arbitration in Singapore, even as the KGLL Group has appealed to the Court of Appeals to stop the Angeles City Regional Trial Court from enforcing its temporary restraining order and status quo order filed by Peregrine.
The appellate court has yet to decide on the issue. Peregrine reportedly is being pursued by various contractors for arrears worth $6 Million.