DURING the Senate hearing on the controversial Iloilo Convention Center (ICC) last week, Senate President Franklin Drilon said that he is “proud to be associated” with the project that is located in his hometown of Iloilo. Senator Drilon cited the fact that the government became a beneficiary of the donation of land valued at more than P520 million. Indeed, the national government did not spend a single centavo for the site of the ICC that is now being built.
On the surface, it looks like an act of magnanimity on the part of MegaWorld Corp. to generously give to the Philippine government a piece of land inside its Iloilo Business Park that is now being valued at more than half-a-billion pesos. However, this 1.7 hectare of land that Senator Drilon refers to as “prime property” donated to the Department of Tourism (DoT) has become the source of apparent anomalies in the ICC.
The reality is that MegaWorld needs the P700 million convention center being paid with public funds more than the ICC needing the land donation for its site. It is a fact the pace of development inside the 72-hetare Iloilo Business Park (IBP) has been rather slow since MegaWorld bought the old Iloilo Airport in 2007. There are hardly any locators inside the IBP, except for Richmonde and Marriott hotels owned by MegaWorld itself.
What is intriguing with the MegaWorld donation for the site of the convention center is that it was already in the Master Plan of the Iloilo Business Park when the donation was made. As Senator Sergio Osemeña III pointed out in the in Senate hearing: “As matter of fact, it could have been MegaWorld that decided where to put the convention center.” And rightly so, the ICC is conveniently located between the two hotels owned by MegaWorld.
It seems that Senator Osmeña could see through the cozy arrangement with the donation. The Vice-Chairman of the Blue Ribbon Committee addressed Senate President Drilon with the question on whether Andrew Tan of MegaWorld could have paid for the convention center. The most that Senator Drilon could say was “I could not speculate on that matter.” In fact, Mr. Tan could have, but did not because he got it for free.
Tourism Secretary Ramon Jimenez has said that upon completion of the Iloilo Convention Center (ICC), it will be bidded out to the private sector for its operations.
Guess who will most likely win the bid in a similar manner that Hilmarc Construction Corporation won the “negotiated procurement” of the ICC contract? Sounds like MegaWorld to me, of course!
Tax credit scam?
One of the questions that emerged on MegaWorld’s donation is what will the property developer gain from its “generosity?” No less than Senator Drilon, the ICC project proponent, admitted that “there was commercial benefit” by MegaWorld during the Senate Blue Ribbon Committee hearing. Unfortunately, that benefit is stunningly disadvantageous to the national government.
As per Drilon’s own estimate, total value of the land donation with an area of 17,371 sqms is P521 million. His computation is based on P30,000.00 per sqm that 18 times the acquisition cost of MegaWorld when they acquired the old Iloilo airport at P1,666 per sqm. MegaWorld paid P1.2 billion for the 72 hectares of land in 2007.
Hence, since MegaWorld made a donation of land valued at over P500 Million, then it will also received a tax credit of the same amount of more than half-a-billion pesos. That would be a lot of money to be lost from the government revenues.
The acquisition cost of P1,666 per sqm for 17,371 sqms of donated land is only around P29 million. Even if the cost of capital, appreciation of land value and site development are factored in, the present value of the donation would not exceed P100.0 Million, which is already a 245 per cent increase from its acquisition cost.
But, instead of receiving a tax credit of only P100 million or less, MegaWorld will now receive a tax credit of more than P500 million, which is more than P400 million than what it should get. Yet the figure of P100 million given here is already a 245 per cent increase from its acquisition cost of only P1,666.00 per sqm!
Iloilo Museum & Gallery
The P1.0 billion Iloilo Convention Center (ICC) will become a veritable White Elephant after the Asia-Pacific Economic Cooperation (APEC) meetings in September 2015. Of course, there is even the possibility that the ICC may either be not completed on time for the APEC senior ministerial meetings or that the APEC meetings will not held at the ICC because of all the controversies that surround its construction.
After the 2015 APEC meetings at the convention center in Iloilo City, it is farfetched for it to host future international conferences for the simple reason that the venue is not exactly an attractive place for delegates to go to. The regional centers of Cebu, Davao and Cagayan de Oro are more alluring than Iloilo. Even in Western Visayas (Region VI), Bacolod would be a much preferred venue for conventions than Iloilo City.
Instead of the controversial convention center, what could have been built as a tourist attraction is Museum and Gallery not only for Iloilo, but also for the contiguous provinces of Antique, Aklan and Capiz on Panay Island. When visitors go to tourist destinations here and abroad, they usually would go to museums and galleries. They do not go to a convention center unless they are delegates to the conference there.
Iloilo could have built a beautiful Museum and Gallery with a P1.0 Billion budget using the world-class talents of the likes of Architect Francisco “Bobby” Mañosa, who is world-re knowned for his Filipino Design in Architecture.
The architectural firm of Mr. Mañosa has, among others, planned and designed the Coconut Palace (now the Office of the Vice President), San Miguel Corporation building, the famous Amanpulo and Pearl Farm resorts that reflect our rich cultural heritage.
It is simply amazing that with the almost P1.0 billion in the despicable DAP funds that he received, Senate President Drilon was unable to conceive of a Regional Museum and Gallery that could be a major tourist attraction in Iloilo and a source of pride for the whole Western Visayas (Region VI). How sad.