WHARF WAR: Iloilo City to Sue Over Parola Ferry Terminal Deal

By Rjay Zuriaga Castor

The city government of Iloilo is preparing to take legal action against DoubleDragon Properties Corp. and Iloilo Guimaras Ferry Terminal Corp. over what it calls an unfair joint venture agreement (JVA) for the operation of the ferry terminal at Parola Wharf.

The Iloilo City Council last week granted a “blanket authority” to Mayor Jerry Treñas to represent the city in any legal proceedings, including the possible nullification of the 2012 JVA signed during the administration of former Mayor Jed Patrick Mabilog.

Treñas, along with City Legal Officer Edgardo Gil, Atty. GV Eutiquio Cunada, Atty. Llonil Viterbo, and Atty. Joseph Edward Areno, is authorized to pursue legal proceedings or negotiate an amicable settlement.

The decision follows DoubleDragon and IGFTC’s alleged refusal to renegotiate the terms of the 2012 agreement, which the city claims is highly disadvantageous despite its ownership of the 1.3-hectare property.

Councilor Rex Sarabia noted that the Committee on Transportation, led by Councilor Sedfrey Cabaluna, explored possible settlements or amendments, but these efforts failed.

“The city government explored any possible applicable settlement or amendments of the JVA, which has already failed, so there is no recourse for the city government other than to file the legal action,” he said.

Sarabia chairs the Committee on Personnel, Good Government, and Public Accountability and Oversight.

Cabaluna noted that while his committee initially hoped for renegotiation, he acknowledged the CLO’s position that the other parties were unwilling to sit down with them.

Sarabia stressed his firm stance that there should not have been any settlement from the start, citing that the JVA is “patently illegal and unconscionable” and biased against the city government.

“[There are] patently unconscionable terms… DoubleDragon has a disproportionate profit in terms of services, value of the property involved, and the benefits. I was very staunch from the beginning that we don’t need to approach the JVA — just file the action outright,” he said.

In a letter to the council, Treñas cited findings from the CLO outlining four major issues:

1. An unfair profit sharing since the city only gets a 1% to 5% share from the terminal’s operations and businesses inside the project.
2. The corporation allegedly failed to submit annual financial and operational reports to the city, limiting the city’s monitoring of its interests.
3. Only DoubleDragon was authorized by the City Council, not IGFTC, making IGFTC’s involvement and profit-sharing legally questionable.
4. There was no adequate valuation of the land and building, which should have been the basis for a fair profit-sharing structure.

The CLO had sent three demand letters seeking renegotiation of the JVA to the two firms, to which they responded twice through their legal counsel.

“There is no basis for the amendment or reassessment of the JVA,” read the response of the terminal operators.

OPENING A ‘CAN OF WORMS’

In a separate interview, Sarabia said the JVA appears to be “not faithful to the initial intent of the agreement that it will be a multi-purpose facility.”

He noted that the mall area is prioritized over the terminal and that parking is restricted to mall patrons.

Sarabia said the filing of cases will “open a can of worms.”

“If you open the can, you’ll find undesirable, messy things. The consequence is that whatever documents or allegations will be provided would be evidence to any subsequent cases that might spring forth,” he said.

He warned that all parties involved in the original approval of the JVA, including members of the City Council and Mabilog, could face potential liabilities.

“It is quite obvious that the previous chief executive has the highest burden in a particular issue,” he added.

Sarabia also noted that rescinding the contract could potentially damage the city’s reputation as it seeks to pursue more Public-Private Partnership projects.

However, he maintained that the current administration’s approach is different from the previous one.

When asked about possible political motives tied to previous projects, Sarabia said politics is inevitable, but laws are in place to protect PPP agreements.

“If there’s no valid reason, it’s not easy to cancel the JVA or any PPP agreements. But with this one, it is clear,” he said.