It seems to be no end in the different onerous agreements
being found by this administration where the government is at the disadvantage.
The Department of Finance (DoF) uncovered an “onerous” land deal between Chevron Philippines and the
subsidiary of a state-owned firm.
It reported that the National Development Co.’s (NDC)
subsidiary, Batangas Land Co. Inc. (BLCI), allowed, Chevron to pay a monthly
rental fee of 74 centavos per square meter (sqm) on a 120-hectare or
1.2-million-sqm state property in Batangas.
Based on the NDC appraisal reports, the current fair market rental
value in that area should be about P17.90 per sqm per month, it added.
Chevron has been paying the government at a minuscule rental
fee for the 1.2-million-sqm industrial park in San Pascual, Batangas that it
uses as an oil import terminal.
DOF said at P10.66 million per year since 2010, the rent
Chevron had been paying was only around 4 percent of the estimated current fair
rental rate of P257.76 million per year.
Finance Secretary Carlos Dominguez
3rd, calls the lease deal as “another
government contract with onerous provisions.”
“Dominguez said the
request for renewal of the deal was recommended by some offices to the
Privatization Council, which found the contract grossly disadvantageous, based
on current fair values,” it added.
“Based on documents
submitted to the NDC board, the DOF emphasized that rentals paid by Chevron over
the 44-year period covering 1975 to 2019 totaled to only P146.51 million or
about P3 million per year, in addition to real property taxes paid by Chevron
under the lease agreement.
DOF added that the
property’s current market value is estimated at about P4.9 billion to P5.3
billion — translating into a rental yield of only about 0.2 percent of the
property’s value.
“Based on current
standards that the State imposes on similar contracts, to have a rental yield
of less than 1 percent is surely grossly disadvantageous to the government and
the Filipino people,” Dominguez said.”
If all the
adjustments are made the monthly rental should be at above P20 million a
month or P257.76 million annually, the DOF said.
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