The government is taking another crack at the privatization of the sprawling Mimosa Leisure Estate in Clark Freeport, setting for October the bidding for the right to lease, manage, operate and develop the estate for 50 years. So the Clark Development Corp. press released last August.
The invitation to bid that CDC published earlier set the base price at P800 million, with the bidder submitting the “highest ranked” and “complying” offer winning the concession.
Requisite qualification included that:
“Prospective bidders should have been in the business of mixed use, tourism-related activities equivalent to at least 50 percent of the P5 billion committed investment.”
The terms of reference (TOR) for the bidding were made available to prospective bidders for a nonrefundable fee of P500,000 right on the day the story went to press up to Sept. 14. This year.
A pre-bidding conference was slated on Sept. 16 at the CDC boardroom, with the submission of bids set for Oct. 13. This year.
On October 1, the papers announced CDC had “initiated” Mimosa’s privatization with “at least nine foreign and local companies” participating in the pre-qualification of bidders.
Declining to name the bidders, CDC President-CEO Arthur P. Tugade only assured that: “Doon sa siyam na nag-participate, halos kalahati locally-situated. At sa background nila, hindi naman maliliit, yun bang tinatawag nilang reputable at may character sa negosyo.”
Sources however told us, as I wrote here under the head “Selling Mimosa” (Punto! Oct. 5-6. 2015), that among the bidders were Robinsons, Filinvest, San Miguel Corp., two Korean firms, and one “client” of former CIAC head honcho Jose Victor “Chichos” Luciano.
“Matagal nang pina-privatize ang Mimosa. Yung mga nakaraan, karamihan mga foreign companies.” So was Tugade quoted as saying, even as he expressed hope that this time it would be for real: “Sa aming obserbasyon po… at sana tama yung obserbasyon namin baka matuloy na ho ang privatization, pero mahirap naman magsalita nang tapos kasi may proseso pa rin yan.”
Tugade could not have spoken any worse, and sooner.
Golfers cry foul
First to raise a howl over the Mimosa bidding was the Mimosa Golf and Country Club Association, Inc. led by local media mogul Allan P. Dungao.
Barred from the pre-bid conference on Sept. 30, Dungao assailed what he called the “lack of transparency of CDC.”
“We are a party of interest, having bought and being holders of club membership shares in Mimosa. Keeping us off something CDC said is ‘open public bidding’ is depriving us of our right as Mimosa stakeholders,” argued Dungao.
How, if ever, the golfers’ concerns were addressed by the CDC, neither Tugade nor his PR department made public.
Even as the restiveness that obtained among the Mimosa workers was placated somewhat by Tugade thus: “…aasikasuhin namin ang mga issues ng mga empleyado. Magtutugma ang mga kasunduan ng CDC at mga empleyado.”
In our aforecited column and in our banner story on the Mimosa golfers’ dismay over CDC over the pre-bid conference, we mentioned the claims of the creditor banks on the estate owing to the loans contracted with them by original Mimosa developer-owner Jose Antonio Gonzalez. Which – the banks’ claims – never factored in any of the CDC press releases on the projected bidding.
All that the PRs said of the Castilian losing control over Mimosa was: In 1998, the CDC regained control over the property from Mondragon Leisure and Resorts Corporation which failed to pay its rental fees to the government. Circumventing the other, even meatier, substance to the story – the hundreds of millions of pesos the creditor banks extended to Gonzalez.
Creditors warning
Thus, BusinessWorld on October 16: Creditors of the Mimosa Leisure Estate’s (MLE) original developer warned investors against joining the privatization efforts launched by the Clark Development Corp.
Stern, the creditors stand that: …(A)ny lease agreement with the CDC would be null and void due to the government’s failure to take prior agreements with them into account.
Sterner yet: The special purpose vehicle for secured creditors…said it would be forced to foreclose on MLE’s assets and pursue legal action “to protect (their) rights, including that against the colluding winning bidder.”
On the grounds that: …(T)he Terms of Reference violated the 2004 memorandum of agreement with CDC on the protection of creditors’ rights…(having) held their claims in abeyance in exchange for CDC’s assurance of a percentage of casino proceeds and the protection of their rights in the privatization.
Citing: …(T)he Supreme Court’s 2005 decision in the case of G.R. No. 154188, where it upheld creditors’ rights to foreclose the collateral leasehold rights over the MLE.
Accusing: CDC did not inform the public of the existence of liens and encumbrances, and pending foreclosure cases.
Offhand, see there CDC’s epic ignorance, if not gross incompetence, to exercise due diligence on the creditors’ concerns as part of the groundwork preparatory to the Mimosa bidding.
Which, in effect, is a total negation of CDC’s winning Executive Leadership Team in the recent Asia CEO Awards. Unless cluelessness and ineptitude have become corporate core values, of course.
CDC did not inform the public of the existence of liens and encumbrances, and pending foreclosure cases.
On second reading, it assumes a deeper meaning; it virtually constitutes an indictment.
Of a willful act of deception, CDC is tagged there. That is not only utterly immoral. It is patently criminal. A scam off a scum, to take it to the extreme.
Aye, a travesty of the very transparency Tugade is trumpeting at the CDC.
