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BAGUIO CITY – Pursuing the public-private partnership mode is the best option for the City Government of Baguio in pursuing the long-delayed redevelopment of the city public market. This as City Administrator Bonifacio dela Peña stressed that city government cannot afford to do the development project on its own, and said taking out a loan, as earlier considered, to raise funds for the project is deemed detrimental than beneficial to the city.
Dela Peña, who chairs the Public-Private Partnership for the People (P4) Initiative committee, made the statement following adverse reactions on the move of Mayor Benjamin Magalong last week giving SM Prime Holdings Inc. the Original Proponent Status (OPS).
Councilor Mylen Yaranon reportedly slammed the grant of OPS to SMPHI, a private corporation, saying the city’s public market should be developed by the city government and that the unsolicited proposals of both SMPHI and Robinsons Lands Corp. are deficient and should be rejected.
Dela Peña explained that it has been proven by the city’s financial experts that the city cannot afford to handle the market development. While it is a fact that the city has savings, he said these savings cannot be used solely for the market development as the city has other essential and priority projects to undertake.
He said borrowing the needed amount from banks is also proven not for the best interest of city. In talks with the Land Bank of the Philippines and Development Bank of the Philippines, loaning the amount of at least P6 billion would entail about P250 million to P300 million as annual amortization for the city government.
Even if the terms would be giving the city a grace period before the annual payment starts, the city would still be hard up in keeping up with its payments and other city projects will be sacrificed.
“There is no way (for the city) to fund it. We are not capable of funding it. The PPP mode is our best option, the most ideal way for us to pursue the market development, as proven by our local financial experts and city council itself,” Dela Peña said.
The Local Financial Committee earlier conducted a financial study on the capability of the city government to develop the city market and recommended that the building cost would be a burden and the projected income from stall rentals may not be enough to raise the yearly amortization.
Dela Peña said the city council in fact has agreed to the PPP modality and approved of it as mentioned in Resolution 400 series of 2020, which recommends to the PPP proponents to consider adopting the architectural design of the master redevelopment plan for the city public market, subject to minor revisions.
He appealed to the concerned parties not to muddle the issue and stick to the facts so as not to confuse the public on intentions of the city government, which is finding the best way to finally push through with the long-delayed market redevelopment.
“Let’s be honest, objective and factual para hindi nalilinlang ang mga tao. Madaling sabihin na tayo na ang magpagawa, but show us the numbers. We have the figures, as proven by our Local Finance Committee who knows more about the city’s financial situation,” Dela Peña said.
He added the grant of OPS to SMPHI is within the authority of the city mayor. He said the OPS does not automatically award the project to it, but there will be negotiations where terms and issues will be discussed and fix any deficiencies and later subject to the Swiss Challenge where all other interested entities may challenge the OPS grantee’s proposal and present their respective offers. By HENT