Iloilo City to Renegotiate 2012 Parola Wharf Deal

By Rjay Zuriaga Castor

The Iloilo City government plans to renegotiate the Joint Venture Agreement (JVA) for the Iloilo-Guimaras Ferry Terminal Services at Parola Wharf after discovering that some provisions of the contract, signed 12 years ago, are disadvantageous to the city.

The Iloilo City Council approved a resolution during its Jan. 30 regular session authorizing the City Legal Office (CLO) to initiate negotiations with Double Dragon Properties Corporation (DDPC).

“The [CLO] is requested to complete the renegotiation proceedings within 60 calendar days and report to the Sangguniang Panlungsod (City Council) the results of the renegotiation,” the resolution stated.

City Mayor Jerry Treñas expressed his support for the renegotiation, stressing the importance of securing better financial terms for the city government.

“If the renegotiation does not yield fairer and more favorable terms, I will not hesitate to rescind the contract,” Treñas said on Jan. 31.

The JVA was signed in October 2012 by then-Mayor Jed Patrick Mabilog on behalf of the city government and Ferdinand J. Sia, representing DDPC and the terminal corporation at Parola.

In March 2023, the City Council passed a resolution requesting the CLO to review the JVA, assess both parties’ compliance with its provisions, and determine whether renegotiation or rescission was warranted.

After its review, the CLO recommended renegotiating the agreement’s financial aspects, citing concerns that the city’s profit-sharing arrangement was inadequate. The recommendation considered inflation, the consumer price index, and other economic factors.

The CLO highlighted several issues, including the lack of a Master Development Plan for the project and the absence of provisions in DDPC’s proposal for constructing commercial buildings such as CityMall.

It also flagged the absence of a proper assessment of both parties’ asset contributions, which should have determined profit-sharing ratios.

Under the current agreement, Iloilo City’s revenue share starts at only 1% of gross terminal income or PHP 200,868 annually, increasing to 5% over 25 years. This is considered insufficient, given the city’s ownership of a 10,687-square-meter lot valued at PHP 183.35 million as of 2024.

In comparison, the commercial building constructed by DDPC is valued at only PHP 105.66 million, raising concerns about undervaluation.

The CLO also noted that DDPC failed to submit annual reports on project operations, a requirement under the JVA. Mayor Treñas confirmed that his office has not received any reports from DDPC.

The resolution mandates the CLO to work swiftly to address these issues, ensuring the renegotiation aligns with the city’s best interests.