1 month ago
14
ILOILO CITY — The Iloilo City government is set to renegotiate the joint venture agreement (JVA) for the Iloilo-Guimaras Ferry Terminal Services at Parola Wharf after finding certain provisions of the contract to be disadvantageous to the city.
The move comes 12 years after the agreement was signed by then-mayor Jed Patrick Mabilog and Ferdinand Sia, who represented two corporations: Double Dragon Properties Corp. (DDPC) and the terminal corporation at Parola.
The Iloilo City Council approved the resolution authorizing the City Legal Office (CLO) to initiate the renegotiation with the DDPC.
"The CLO is requested to complete the renegotiation proceeding within 60 calendar days and report to the City Council the results of renegotiation," the resolution read.
Iloilo City Mayor Jerry Treñas has expressed his support for the renegotiation, emphasizing the need to secure better financial terms for the city government.
Get the latest news
delivered to your inbox
Sign up for The Manila Times newsletters
By signing up with an email address, I acknowledge that I have read and agree to the Terms of Service and Privacy Policy.
"If the renegotiation does not yield fairer and more favorable terms, I will not hesitate to rescind the contract," the mayor said on Jan. 31.
In March 2023, the City Council requested the CLO to review the agreement and assess whether renegotiation or rescission was necessary.
Following its review, the CLO recommended renegotiating the financial terms, citing that the city's profit share was neither fair nor just. The review considered factors such as inflation, consumer price index, and overall economic conditions.
One of the major concerns raised was the city's revenue share from the terminal, which starts at only one percent of gross terminal income or P200,868 annually, gradually increasing to five percent over 25 years.
The CLO deemed this share insufficient, considering that the city owns the 10,687-square-meter lot where the terminal operates.
The value of the city-owned lot has significantly increased from P51.65 million in 2012 to P183.35 million in 2024, while the commercial building constructed by DDPC is valued at only P105.66 million, raising concerns of undervaluation.
The CLO also flagged the lack of transparency in the implementation of the JVA. It noted that DDPC's proposal did not originally include the construction of commercial buildings and no master development plan — a requirement under the JVA — has been forged.
The agreement also lacked a proper assessment of each party's asset contributions, which should have determined the profit-sharing structure, the legal office said.
The CLO also pointed out DDPC's failure to submit annual reports on project operations, a requirement under the JVA.
