Develop the market, but not through privatization.
Councilor Mylen Victoria Yaranon said she is not in favor of private investors developing the Baguio public market.
“Definitely, the public market needs to be rehabilitated, but I am not in favor of awarding it to giant malls,” Yaranon said, reacting to the recent decision of Mayor Benjamin Magalong to award the original proponent status (OPS) to SM Prime Holdings, Inc. The award of OPS does not automatically award the modernization project to SM Prime, but it gives the former the right to match rival firms’ offer in a process called Swiss challenge.
Yaranon said the development of the public market is best left with stakeholders through a joint venture.
“If we allow malls to develop the public market, it will compete with the vendors, which is not fair.”
Instead of giant corporations, Yaranon is rooting for the vendors’ group, the Baguio Market Vendor’s Association, to be the city government’s partner in modernizing the public market.
The vendors’ group was not able to participate in the bidding for lack of juridical personality.
“They offered to develop the market through a joint venture, which is better than a lease contract. Lease contract, according to the Public-Private Partnership (PPP) Center, is not recommended in a PPP. It’s either joint venture or build-operate-transfer,” she said.
She added issues – such as sub-leasing among other concerns that hound the market and is seen to be addressed if the facility is privatized – can be addressed even if the development project is awarded to the vendors’ group.
“This can easily be addressed. If we enter into a joint venture with them, we can have a different management,” she said.
In terms of income, Yaranon said the city government will be at a disadvantage with SMPHI’s offer since it will realize lower income than what it is currently getting from the vendors’ lease.
She said the city is earning P44 million a year from the current lease from the vendors. “With SM Prime’s offer of P105 per square meter, we will realize P43M a year and yet we will be committed to them for 50 years,” she added.
Under SMPHI’s unsolicited proposal, two floors of the five-story structure it intends to construct will be devoted to the vendors.
Yaranon said the two floors could hardly accommodate the 4,000 vendors at the public market. “They will be cramped in that two floors and our intention to also accommodate the sidewalk vendors will not also be realized,” she said.
Magalong has favored SMPHI over Robinsons Land Corporation, saying the former’s proposal is more advantageous to the city in terms of the area to be developed, the number of years to complete the project, the term of lease, and environmental consideration, among other factors. – Jane B. Cadalig