THE House Committee on Bases Conversion headed by Kalinga Rep. Manuel Agyao will probe next week the unpaid lease rental of private developer Camp John Hay Development Corp. on the 235-hectare former American rest and recreation facility in Baguio City.
This followed the passing of a House resolution urging Congress to conduct an investigation as to why Camp John Hay Development Corp. (CJHDC) is being allowed to continue to operate despite having repeatedly defaulted on its obligation to pay the government the agreed lease rental of the premises.
On Sept. 29 Ilocos Norte First District Rep. Rodolfo Fariñas filed House Resolution 1771, which was supported by 30 other congressmen, including Baguio City Rep. Bernardo Vergara.
Fariñas said that the “noncompliance of the Fil-estate-owned CJHDC of its obligation to pay its debts places the national government and the City of Baguio in a very disadvantageous position.”
In the resolution, the Bases Conversion Development Authority (BCDA) claimed that the CJHDC has outstanding arrears in lease rentals amounting to more than P2.6 billion, which the developer itself acknowledged during efforts to negotiate the payment in three instances.
The CJHDC and BCDA entered into three restructuring agreements in 2000, 2003 and 2008.
“But despite the BCDA’s having virtually exhausted all options for a mutually acceptable solution, the CJHDC still continues to fail to comply with its obligations,” he added.
The CJHDC was awarded the lease contract on Oct. 19, 1996, to develop, manage and operate the 247-hectare Camp John Hay into a special economic zone.
The original lease agreement fixed the rental at P425 million annually for the first five years, starting in 1996 and P150 million annually. Thereafter. The share of Baguio City was 25 percent, or P150 million for the first five years and P35.5 million for the succeeding years.
For the city’s part, City Council Committee on Laws Chairman Richard Carino expressed support to the move.
He said the development in Baguio has been long delayed due to the failure of the company to pay the rentals due the city.
He said “it is about time that the company makes good of its obligation.”
