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Gov’t mulling over new CJH developer?

BAGUIO CITY (June 1) — The private developer of the 246-hectare Camp John Hay (CJH) suspects that the government is eyeing a new operator for the former American rest and recreation facility which is currently embroiled in a questionable tax holiday issue.

“Bases Conversion Development Authority’s (BCDA) recent pronouncements betray its real intention. They want to bring in a new operator,” said Camp John Hay Development Corporation’s (CJHDevCo) spokesperson Atty. Georgina Alvarez.

“Instead of resolving the legitimate issues raised by CJHDevCo relating to the impact of the Supreme Court (SC) decision on the John Hay Special Economic Zone (JHSEZ) tax incentives, BCDA has unreasonably postured to mount an illegal take over,” she added in a rather irate but fighting mood.

The government-run BCDA took over the reign of the American facility when the RP-US Military Bases Agreement expired in 1991. It awarded to CJHDevCo the right to develop CJH in 1996, taking over the rest and recreation facility from the Philippine Tourism Authority (PTA).

Alvarez likewise told media that contrary to BCDA’s statements that the tax issue caused by the SC decision is more apparent than real, the Bureau of Customs (BOC) has recently slapped the developer with P72 million in back duties for the years 1998 to 2004.

The customs’ assessment comes in the heels of the Bureau of Internal Revenue’s (BIR) denial of the developer’s request for authority to print non-VAT receipts and invoices, opining that CJHDevCo has become an ordinary corporation subject to the regular corporate income tax and value added tax imposed under the Tax Code of 1997, Alvarez explained.

Both the BOC and the BIR cited the March 29, 2005 resolution and October 24, 2003 Supreme Court nullifying the JHSEZ tax and duty exemptions as the basis for their action.

Alvarez said that instead of hunting for a new investor, “BCDA should be reminded to honor its tax guarantee and find a solution to the tax problem it has gotten the developer into.” She claimed that BCDA’s actuation is sending a wrong message to other investors - that BCDA is the type of organization that entices you to bid, to enter into a contract where you infuse some P4 billion worth of investments and in the end, abandons you as its guarantee cannot be relied upon.”

The Philippine Dispute Resolution Center, Inc. (PDRCI), Alvarez said, has officially transmitted to the BCDA a copy of the arbitration complaint filed by the CJHDevCo relating to disputes arising from the fifty-year lease contract over CJH.

On May 13, CJHDevCo rapped the BCDA for its reported failure to stand by government’s commitment of a 5 % tax holiday for the former, which was stipulated in the lease contract between the two. The developer also accused the BCDA of refusing to convene the joint committee and to heed CJHDevCo’s demand that BCDA hold it free and harmless from all potential claims from sub-locators, concessionaires, and investors, as well as all governmental bodies resulting from the Supreme Court Decision invalidating the tax and duty incentives in the John Hay SEZ.

BCDA was given 30 days from May 23, 2005 by PDRCI to file its answer in accordance with the arbitration rules.

Unscathed, BCDA has threatened to take over the premier eco-tourism facility prompting CJHDevCo’s president Ferdinand T. Santos to say, “Under the law, a lessor cannot physically eject even the lowliest apartment dweller or even a squatter without a valid court order. To do so will constitute the criminal act of grave coercion, and under the circumstances, a violation of the Anti-Graft and Corrupt Practices Act.”

Santos urged BCDA to rethink its takeover plan and instead respond to the arbitration complaint. “BCDA has already been served a copy of the arbitration complaint. Considering that BCDA itself drafted the Lease Agreement which provides for arbitration in case of disputes, we expect BCDA to file its Answer. Its failure to do so will be a breach of the Lease Agreement,” Santos added.

The developer stressed that it shall not hesitate to take reasonable steps to defend its rights and file the proper criminal cases against all BCDA directors and officers who shall tolerate such disregard of the rule of law. # Artemio A. Dumlao for NORDIS

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