REPRESENTATIVES of 16 companies turned up at Tuesday’s pre-bid conference for the selection of a joint venture partner for the development of the 288-hectare Clark Green City in the Clark Special Economic Zone in Tarlac.
Arnel Paciano D. Casanova, president and chief executive officer of the Bases Conversion Development Authority (BCDA), said the pre-bid conference was held to answer all the questions that prospective bidders may have on the project before they decided to make a bid. The project’s terms of reference (TOR) were distributed to the attendees.
Among the companies that sent representatives were: Ayala Land, Inc.; Century Properties, Inc.; Daichi Properties, Inc.; ESCA Inc.; Federal Land, Inc.; Filinvest Land, Inc.; First Philippines Industrial Park; Hitachi Asia; Jones Lang LaSalle, Inc.; Megaworld Corporation; MGS Construction, Inc.; MTD Phils. Inc.; Nuevo Centro Inc.; ProdigyAE, Inc.; Rockwell Land Corporation; and SUDECO.
The BCDA is looking to partner with a well-established corporation with proven track record in the development, marketing, management and leasing of large property mixed-use development.
The partnership shall be in the form of a Joint Venture Corporation (JVC) to be owned 45 percent by BCDA and 55 percent by the winning bidder. The Joint Venture Agreement (JVA) will have a period of 50 years renewable for another 50 years.
“We are not selling land; in normal circumstances we sell the land. But here [CGC] we are retaining the ownership of the property what we are just selling is the development and the use of infrastructure but this is 100-year basis. Like I said Singapore is only 50-year old. In 50-year time frame you could have enough time to multiple your investment,” Casanova said.
The JVC shall have the full development and usufructuary rights over the 288-hectare property.
Casanova said the usufructuary right may be converted into full land ownership if and when the law so allows in the future, subject to mutual agreement of the two parties.
Also, the BCDA has decided to drop an earlier condition requiring the winning bidder to infuse P2.5 billion as initial paid-up capital to attract more bidders.
Casanova said that 2.5 billion upfront cash investment for capitalization found to be very restrictive that is why BCDA removed that requirement.
“When the first bidding failed, we went back to possible developers and asked them what has been the concern. Some of the concerns is that immediately there is a P2.5 billion cash investment. We understand their concern that you don’t tie up your P2.5 billion immediately, so it has to be a phased expenditure. We’re removing that requirement which we,” Casanova said.
Instead, the BCDA set the minimum acceptable bid is at P160 million or approximately $3.6 million. The winning bidder shall be responsible for forming the JVC pursuant to the JVA to be signed with the BCDA.
“We just simplified everything just like what we did in Bonifacio Global City (BGC), we form a company that is going to have the development rights then we sell the 55% and then from then on we make decisions timing and amount of investments over the years since we already partners. We need flexibility for a real estate,” Casanova said.
“We are basically selling our 55 percent share. Just like what we had in BGC, we started at 10,000 but the winning bidder was 33,000 so it would depend on the highest bidder so we would know that it would appreciate but let the market competition dictate that kind of premium because if we over value it the market would not take it that what we experienced in the first bidding,” he said.
Casanova noted the development of Clark Green City would definitely boost the economy in Central Luzon. “It will serve as an economic driver that is expected to generate jobs and attract investments in the region.”
Casanova said this is not the first time that BCDA has entered into a joint-venture corporation in the development of a similar sized property.
“The BCDA and Bonifacio Land Corporation has forged a joint-venture corporation called Fort Bonifacio Development Corporation (FBDC) that has successfully developed the 240-hectare Bonifacio Global City which is now the most expensive piece of real estate in the Philippines,” he said.