February 23, 2024

City officials are rethinking the loan option to finance the P6-billion city market modernization plan after noting downsides to the scheme.
Mayor Benjamin Magalong on Jan. 28 said the city has to reconsider and look for a better scheme like a joint venture with the private sector, which will not require the city to shell out monetary investment and at the same time will ensure the welfare of the market vendors.
He said the city will not be wanting in offers under the private-public partnership scheme as large investment companies have sent feelers for the market venture.
“There is no need for us to avail of loans since a number of big investors signified intention to this project and all we have to do is select the best deal, evaluate and have a third party help us evaluate to make sure that we are on the right track,” the mayor told the department heads.
He said the market cooperative will not be taken out of the picture as their involvement can be worked up in the deal with the investor.
Upon the mayor’s order, the City Budget Office under City Budget Officer Leticia Clemente and Assistant Budget Officer Severina de Leon conducted an analysis of the financial feasibility of the city market’s master redevelopment plan done by a private company engaged by the technical working group on market development.
In the report to the management committee, de Leon said they found out that the financial aspect of the plan was not viable owing to the high cost of the building design pegged at P48,000 per square meter vis-à-vis the expected income.
The financial feasibility was anchored on the loan availment-city level operation option being considered by the city at the outset.
However, de Leon said their analysis provided recommendations for adjustments in the design and costing and in other components intended to make the project tenable should the city still opt for the loan scheme.
Apart from downgrading the design and lowering the cost, it was also suggested that the operation of the existing market lessors be confined to just two stories while the rest of the floors be leased out mall-style to enable the city to raise seed money and lessen the amount to be borrowed.   
De Leon said loan availment remains as an option of the city government but it needs to be studied carefully especially since the market project is a huge undertaking and the city’s available budget is limited.
“We cannot risk tying up a big chunk of our budget to this single venture,” she said.
De Leon said as far as she can recall, the city has not availed of any loan to fund a project placing it in a good financial standing, which she said could qualify the city to avail of lower credit interest rates. – Aileen P. Refuerzo