City to award contract for 30 hectares of SRP

BY Early January (The Freeman) Updated December 23, 2009 12:00 AM

BY EARLY JANUARY

City to award contract for 30 hectares of SRP

CEBU, Philippines - The Cebu City government expects to award by the second week of January to the highest bidder the contract to purchase 30 hectares at the South Road Properties.

The notice to bid shall be published anytime before this year ends to open to the public and to interested investors the bid for the purchase of the 30-hectare SRP lot facing Mambaling that SM Prime Holdings wants to purchase.

It its proposal, SM Prime Holdings expressed interest to buy six lots covering 30.41 hectares where they intend to build a 25-hectare shopping center, which is almost twice as big as the existing SM City Cebu at the North Reclamation Area.

The rest of the area will be used for the construction of a convention facility, hotels and eventually a school, hospital and condominiums.

While the city welcomes the proposal, it has decided to let the proposal undergo a Swiss challenge which will allow them to participate in setting the terms of the sale while opening doors for other parties to match these terms through bidding.

Mayor Tomas R. Osmeña said that during the latest configuration, the property will be sold by P19 million more on top of the original proposed price of P2.7 billion.

This as there was some adjustments on the lot to be covered; the left boundary has been moved about 100 meters towards the road side to complement to other projects intended for SRP like the Bus Rapid Transit (BRT) system.

Osmeña said the value of lot near the road is a little bit expensive so it is going to cost P19 million more.

In two weeks after the publication, the city expects to close the deal if there will be no challenge.

Aside from SM, there are also other parties willing to invest at the property like the Bigfoot Entertainment which is also interested in buying 4.6 hectares on top of their 25-year lease agreement with the city for two hectares in SRP. The lease was signed on 2007.

Another interested investor is a Korean company wanting to buy five hectares to build a hotel and a casino.

Should SM win the bid, they agreed to make a down payment of 25 percent which is over P600 million within 15 days from receipt of the notice of award.

The balance shall be paid on quarterly installments. Schedules of payment will be set as agreed by the city.

SM Prime holdings earlier said that this project will cost over P20 billion and promises more than 3,000 jobs for the Cebuanos. –Jessica Ann R. Pareja/NLQ (FREEMAN NEWS)