December 4, 2022

After being stalled for more than a month due to the Covid-19 pandemic, the city government through the Public Private Partnership for the People selection committee (P4-SC) has started the first round of negotiations on the market development proposal of SM Prime Holdings, Inc. (SMPHI) last week.

SMPHI was granted the original proponent status (OPS) for what is described as a controversial project by Mayor Benjamin Magalong for being the first “big ticket” project of the city and also the first to undergo the PPP scheme, and due to issues raised by concerned sectors against the OPS holder.

The first stage of the negotiations, which is a part of the 19-step process prescribed by the P4 ordinance in handling unsolicited project proposals, aimed to discuss the details of the 34 terms of negotiations (TON) the city has crafted as talking points between the local government and SMPHI.

In this stage, if successful, the two parties are expected to come up with the terms of reference (TOR), which will then serve as the bases for the Swiss Challenge, where all other interested companies, may participate and challenge or present a better offer to the city.

In the meeting last June 9, the P4-SC resolved to exclude private sector representatives in the negotiation proper stage with SMPHI, where details of the 34 TON are to be discussed.

The move stemmed from the call for P4-SC members to sign an oath of office, a requirement under the P4 ordinance, which provides the P4 members and SMPHI are bound by confidentiality.

City Administrator Bonifacio dela Peña, as P4 chair, explained this provision is pursuant to the P4 ordinance, which among others binds the members of the two parties who are directly involved in the negotiation proper not to reveal any information on the details of the terms under negotiation for reasons of confidentiality.

Magalong had invited the private organizations and individuals, who earlier have been part of the crafting the 34 terms of negotiations, to the June 9 meeting to serve as observers or consultants and advisers in his effort to allow the public to witness how the negotiations will be done for transparency.

Councilors Betty Lourdes Tabanda and Mylen Yaranon, members of the P4-SC, along with some private sector representatives, questioned the move saying it defies the aim for transparency.

Tabanda abstained in the process of arriving at the decision to exclude.

Atty. Rowena Tabanda, who represents the Philippine Chamber of Commerce Baguio-Benguet, said the obser-vers as a whole are of the opinion the P4-SC cannot be selective on what information to share and what not to share. 

“If that is the case and observers will be excluded from the most crucial stage in this proceeding, then we do not see any need for the obser-vers to be present in the entire process, because by that time everything has been said and decided, what purpose will the observers have? With the decision to exclude us, by the time that you will be arriving at the TOR, we do not see any reason for us to continue participating in this process,” Tabanda said.

The PCCI representative added it is not the obligation of their organization to protect the proponent.

“It is for this very reason we were invited, so that we can relay the sentiments or opinions and the decisions of the organizations to the P4 committee so it can be considered in the negotiation. It is at this stage it is crucial to get the input of different stakeholders. Speaking for my organization, if we cannot openly discuss it and we will not be allowed to convey the majority decision of the chamber, then we do not see any reason in participating. We would like to participate but if we are not allowed to discuss it among ourselves it defeats the purpose of inviting us to be members of this committee,” she added.

Atty. Leticia Clemente, who chairs the P4-SC financial committee, explained the signing of the oath of office is in relation to those who should observe confidentiality during the negotiation.

She said they do not intend to hide anything in limiting the negotiation proper proceedings.

“The P4 ordinance involves the P4 members who are directly involved in the negotiation process. We underwent the consultation process, which included the crafting of TOR where we were not limited in getting the opinion of selected consultants and other members. We consult our community. They are not barred from providing us relevant information in crafting our talking points with the proponent. But in the process itself, the oath of office shall apply to the members of the P4 who are actually negotiating,” Clemente said.

She added this is not only for the benefit of the proponent, but also for both parties.

Dela Peña said the confidentiality clause is only during the negotiation stage.

“No information should come out during this process because the crafting of the TOR is between the proponent and the local government only, and details of this will be released later on and published. That will be the basis for the Swiss Challenge by all interested to participate in this project. So there will be a proper time to release the information from the negotiation process, which is the publication of the TOR. Hindi kayo (observers) saling pusa lang dito,” dela Peña said.

A three-minute recess was called, and during which the private sector representatives left the meeting hall.

The meeting proceeded with the presentation of the 34 TON. It was agreed that the negotiations shall focus on the project scope, implementation arrangements, reasonable rate of return and other parameters determined by the body as the case may be, and the terms and conditions of the draft contract for the unsolicited proposal, among other terms.

Parties also deliberated on which of the 34 TON should be prioritized.

In his opening message earlier in the meeting, Magalong appealed to the SMPHI to listen to the voice of the Baguio people.

“Now that we are into negotiations, my appeal to you is this is the right opportunity for you to give back to the community. I know you have been doing that in other localities but make it a very special case for the City of Baguio, considering the fact that there are some issues against SM in the city. I appeal that you leave a legacy and this market development probably would be the best opportunity for you to do that, and the negative notions about SM will finally be deleted,” Magalong said, as he explained he made the right decision to veto the earlier P4 recommendation that granted the OPS to Robinsons Land Corporation, and chose SM based on merit and credibility, fair, and square. – Hanna C. Lacsamana