City council seeks review of JVA on Parola wharf

By Joseph B.A. Marzan

The Sangguniang Panglungsod of Iloilo City on Tuesday passed a resolution seeking to review the city government’s existing Joint Venture Agreement (JVA) with a property developer on the operation and revenue sharing of the Guimaras-Iloilo Ferry Terminal (GIFT) at Parola Wharf.

The resolution called on the City Legal Office to review the JVA with Double Dragon Properties Corp (DDPC), and to assess the compliance by both parties to the agreement.

DPCC is owned by Ilonggo businessman Edgar Sia II and Jollibee founder Tony Tan Caktiong.

The resolution also noted the non-appearance of DDPC’s representatives during the Committee on Transportation’s hearings on December 1, 2022 and on February 7, 2023. The hearings were meant to review the provisions of the contract.

“[O]n 9 January 2023, a letter was sent to Mr. Jonathan Umali, head of the Corporate Affairs of Double Dragon Properties Corporation, to inquire about his or his representative’s availability to attend the committee hearing; yet there was no response from the said Mr. Umali or the corporation,” the resolution read.

“[A]nother Committee Hearing was conducted on 7 February 2023, 1 o’clock in the afternoon, at the 609 Conference Hall, Iloilo City; yet again, no representative from Double Dragon Properties Corporation was able to attend,” it added.

The council also pushed the City Legal Office to coordinate with the City Treasurer’s Office, City Assessor’s Office, and the Local Economic Enterprise Office, on the proper course of action in relation to the contract.

Its author, Councilor Sedfrey Cabaluna, who is also chairperson of the city council’s Committee on Transportation, said the review would allow the city government to renegotiate the contract.

“The resolution was to call on the City Legal [Office] to review this [JVA] and try to re-negotiate in good faith, to give the city what is due, and if it isn’t, see if we can rescind it if it’s against public interest, if it’s disadvantageous to the city, and it appears to be disadvantageous to us,” Cabaluna said.

Cabaluna lamented how DDPC ignored their requests to appear in the committee hearings, which he said prompted the proposal and eventual passage of the resolution.

It was in these committee hearings that they found that the revenue shares remitted to the city government under the contract were inequitable, and that it granted DDPC exclusive rights over the use and operations of the GIFT.

“Unfortunately, [DDPC] seems to have been ignoring us. We invited them, and we even suggested to them to set whichever schedule they may be free on, but there was no [response from them]. Despite their non-attendance, we still discussed the salient points on this,” Cabaluna said.

The councilor had already raised last December the concerns over inequity in the share, as well as the seemingly delayed start of revenue remittances to the city government in 2019, just as the nearby Ortiz Wharf, which also served routes to Guimaras, ceased to operate.

The transportation committee’s report on the hearings stated that the City Treasurer’s Office had no way of knowing whether or not DDPC was actually compliant with its financial obligation under the JVA.

It also cited the DDPC’s highest remittance from GIFT revenues in August 2022 amounting to ₱535,591.83 despite the seemingly high volume of travelers between Iloilo City and Guimaras.

“The CTO merely receives the annual payments. It has no way of checking if the amount remitted is compliant to the provisions of the agreement, since the Office is not furnished by the Corporation with the financial reports or any document that reflects the itemized income,” the report read.

“One participant manifested that the annual payments made by the Corporation to the City Treasurer seemed to be relatively low, considering the number of passengers and cargoes entering and exiting the Ferry Terminal covered by the JVA. He reckoned the Corporation appears to have incorrectly declared its annual income,” it added.

The JVA signed in 2012 grants DDPC the right to the development, operation, and maintenance of the GIFT for 25 years.

It would also guarantee the city government between 1 to 5 percent of the GIFT’s gross terminal fee revenues, as well as 1 percent of gross berthing fee revenues, 1 percent of gross cargo fee revenues, and 1 percent of gross rental revenues, all exclusive of Value-Added Tax (VAT).

The DDPC is also tasked by the agreement to submit an annual report to the Office of the City Mayor on the commercial operation and maintenance of the terminal.

Daily Guardian is still trying to get DDPC’s comment.