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Cebu’s
South Road Project recently got a shot in the arm
following the approval and acceptance of the Cebu City
government of a proposal from Filinvest Land Inc. to
develop a portion of the 240-hectare South Road Properties
(SRP).
But with
Cebu City Mayor Tomas Osmeña’s final term ending in 2010,
and a government bureaucracy that has often stacked road
blocks rather than highways for government-private sector
deals, stakeholders are starting to worry if the famed SRP
could finally deliver on its promise set decades ago.
Mayor
Osmeña expressed confidence the deal with Filinvest will
shoot the value of the SRP property. He announced stepping
up of negotiations with the SM Group and the Ayala
Group—two other big-ticket developers who are eyeing
wholesale portions of the property.
AERIAL photo of the South
Road Project
“If
there’s something laudable about the mayor other than
securing the loan for the SRP, is to get these developers
to coexist with one another and not to try to kill each
other,” said Joel Mari Yu, the managing director of the
Cebu Investments and Promotions Center, the marketing arm
of SRP.
The grand
plan is for Filinvest to take the leisure and residential
sector out of 50 hectares of SRP, SM the retail and
convention part and Ayala a huge information-technology
hub—all three properties sitting side by side in a
combined 150-hectare chunk.
An
industrial complex has also been set aside for
manufacturing firms.
Mayor
Osmeña himself expressed confidence the SM and Ayala
groups will soon get into terms with the city, admitting
he himself is the biggest problem why after almost two
decades no single locator has produced the 50,000 jobs and
billions of revenues he promised the people of
Cebu will get from SRP.
Problems
still hound SRP
At
present, there is no clear workflow at the SRP. Every
plan, every negotiation, every rejection comes from only
one man, Mayor Osmeña.
Proposals
to hire a professional property management team and for a
single property developer to run SRP was rejected by the
mayor.
“I am the
problem. If I don’t like their [developers] plans, I send
it back to them. My only concern is to get the best deal
for Cebuanos,” he said.
The
mayor’s much-publicized stern handling of his brainchild,
the SRP, has sent a message that he means business, but
critics also said it could also mean without Osmeña, SRP’s
house of cards may collapse.
CEBU South Road
SRP was a
landmark on its own in Philippine history. For the fist
time, a local government unit was able to secure a loan
from the Japan Bank of International Cooperation in 1992
for a big-ticket project—¥12.315 billion—as part of the
Metro Cebu Development Project (MCDP) 2 package.
It also
helped that Cebu politicians had an ally in then President
Fidel V. Ramos. The national government then pitched in
and poured ¥18.391 billion (national loan) to build the
Cebu South Coastal Road, which will connect SRP to
Talisay
City in the south and Cebu City’s international ports in
the north.
The
25-year loan payment was staggering for Cebu City
residents, who felt the most burden in the last three to
five years as loan amortizations ate up almost a quarter
of the city’s average P2-billion annual budget.
Many
politicians, including the mayor’s own cousin, former
senator John Osmeña, said the city is nearing bankruptcy
because of the SRP loan.
It did not
also help when in 2004, Cebu City’s neighbor to the south,
Talisay City, announced it is staking a claim on 54 of the
primest portions of SRP, saying it encroached into its
territorial waters. The SRP’s land titles were in peril,
and the development plans were set back once again.
While SRP
negotiations look promising at the present, the political
situation and the red tape is not.
Mayor
Osmeña is not in good terms with Gov. Gwendolyn Garcia,
whose administration is also trying to pursue its own
“urban renewal program” by recovering some 250 hectares of
prime property inside Cebu City and develop it, in
conjunction with the private sector.
The mayor
has also once given SRP to the care of his former vice
mayor, later Mayor Alvin Garcia, only to burn bridges over
the SRP ending in an anticipated election battle between
the two in 2005 and 2008.
Developers
and even the city government are still reeling from the
Commission on Audit’s (COA) rejection of the supposed
P400-million sale of city land to Robinsons Land in 2006,
only to be blocked by the COA, with the Gokongwei group
already advancing P180 million.
The
Filinvest proposal is far from being completed. It has to
go through review by the COA, a public price challenge and
formal approval by the Cebu City government, anything can
still happen.
But Mayor
Osmeña said the people of
Cebu must now realize that the SRP is their project and they must
do everything to protect it.
“I leave
it to the people of
Cebu to defend
the project. I have shown to the people what my vision for
the SRP is, if someone comes in and destroys it, let the
people of the city defend it,” he said.
“My job is
not to make the city dependent on me. I’m like a parent
who teaches his child to be responsible s when the time
comes, that child will not need the parent anymore.”
Osmeña’s
anointed successor, Vice Mayor Michael Rama, has himself
announced in several occasions that he was committed to
the original program for SRP.
Rama’s
work ethic also pacified jitters among the business sector
who are all preparing for SRP’s big explosion.
To ensure
sustainability, Osmeña and Rama are now considering two
school of thoughts for the future of SRP. One is to create
an SRP management board as a department of City Hall,
while the second is to create a city government-owned
company to handle SRP affairs.
Yu of the
CIPC also insists the lure of the SRP and Cebu as a whole
is too juicy for developers and locators to resist.
“There is
no other property in the country that is as close to the
business district, to the ports and to the resorts. There
is no other place in the country with the steady stream of
educated manpower like Cebu has,” he said.
Yu said it
will not only be through land sales and leases where the
city will rake in revenues. The city is set to get cuts on
power rates, water rates and even services inside the SRP.
SRP lots
are now being offered at an average of P15,000 per square
meter, or P150 million per hectare.
Yu said
the city will also earn between P0.22 to P0.24 per
kilowatt-hour from power consumption estimated at 100 MW
for the whole SRP, P5 to P10 per cubic meter on water
consumed and a 5-percent share on all service contracts
inside the property.
The
generated employment and support economies will also be
invaluable.
“When SRP
goes full blast, trust me, Cebu City will be the richest
local government unit in the country.” | 
