EXPLAINER: Jolting claims in lawsuit to stop P5.5-B Carbon project: (1) 90% of lands not owned by City; (2) ordinance not validly passed. Megawide, opposers clash on thrust, method. Rama to keep 'curing defects.'

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LAST Wednesday, August 25, an "alliance" of groups of vendors, urban poor and homeowners, along with "stakeholders and supporters," filed a petition with the Cebu Regional Trial Court, seeking to stop the P5.5-billion Carbon Market development.

The petitioners say the joint venture agreement (JVA) between Cebu City Government and Megawide Construction Corporation was "illegal, invalid and void," alleging "abuse of discretion and malice." They ask for a temporary restraining order, with writ of preliminary injunction and mandamus.

The want the court to stop the developers and the City from "destroying" any structure or facility and doing any development work for the Carbon project. The plaintiffs also ask for P100,000 damages and the court to declare Megawide not entitled to recover its initial investment.

Here are seven takeaways from what happened so far:

[1] THE COMPLAINANTS. There are more than a dozen names of organizations listed as petitioners, some of which the public had not heard about, led by "Carbon," acronym for the kilometric Carbohanong Alyansa alang sa Reporma ug Bahandianong Ogma sa mga Nanginabuhi.)

Two party-list groups, Sanlakas and Akbayan, are in the action, along with groups of women, vendors, neighborhood homeowners, fishermen, urban poor, and "several taxpayers, consumers, and individual stall owners."

[2] THE DEFENDANTS. Being sued are Megawide and Cebu2World Development officials, led by Manuel Louie Ferrer (executive director for MW's infrastructure development), and Edgar Saavedra, and officials of the City Government, including Mayor Edgar Labella and Vice Mayor Michael Rama, City Administrator Floro Casas Jr., City Legal Officer Rey Gealon, and the treasurer, the planning and development officer and the budget officer and assessor.

Members of the City Council, which approved the JVA and authorized the mayor to sign it, are not named in the complaint. Vice Mayor Rama, Sanggunian presiding officer, is included though.

[3] AWKWARD POSITION OF MIKE. The lawsuit seems to have placed VM Rama in an awkward position. While he is bound to defend the JVA -- as one of the defendants, having presided over the Sanggunian that reviewed and approved it -- Mike Rama has also been one of its persistent critics. An administration and Partido Barug stalwart, VM Rama has publicly deplored its defects, some of which coincide with the flaws alleged in the lawsuit.

Last April 18, Mike Rama publicly declared he was not against the Carbon project but there are defects -- "disturbing facts and lapses of procedure" -- in the contract that should be discussed and corrected before construction. They include, the VM said, the absence of a public hearing and the Sanggunian majority's rush last January 6 for its approval, despite his warning that controversy over it "could lead to a court of law."

Thursday, August 26, the vice mayor told SunStar it won't be a problem for himself as he comes "with clean hands." He just played the role of a presiding officer, he said. Then when he aired his views against some provisions in the JVA, he stepped down, he said, and spoke as a member. Yet, his colleagues, or the Barug majority, went full speed ahead and approved the JVA. In last March 24's session, he told the Sanggunian: "Sala ma ni nato ba!"

VM Rama wouldn't say now he could defend a project that he repeatedly said needed correction of its flaws. He'd continue though, he said, "to proceed with a curing intervention" in the City Council.

[4] THROWING ALL AT MEGAWIDE, CEBU CITY. The complaint heaps everything it could, including the kitchen sink, on the two JV partners, from the deal's preparation to its execution, and the contract itself.

The procedure: Allegedly no complete proposal on the joint venture from Megawide; the City failed to conduct "in-depth and thorough" evaluation of the unsolicited proposal and didn't hold "detailed negotiations"; no "competitive and transparent" public bidding and "mandatory public consultation and hearing."

Review of JVA: The City Council allegedly "failed to enact" an ordinance approving the joint venture and its component projects. That could be based on (a) the claimed nullity of the agreement from the beginning or (b) the fact that the councilors, without having read the voluminous contract, "rushed" into approving it. Poor legislative performance that it implied by asking in a March 24 resolution that Megawide to defer construction until defects in the JVA can be cured.

Megawide's capability: Private partner's alleged lack of "required financial stability" and "track record" on similar projects.

The terms and conditions: The surfeit of strong negative adjectives gives an idea what the complainants allege about the JVA -- "arbitrary, oppressive, unfair, prohibitive, unreasonable, repugnant to general welfare, public policy and good custom."

Those terms, they allege, will result in dislocation of vendors, removal of "informal settlers," "pittance of a share for the City" ("sensiyo lang" or small change, as some councilors put it).

Plus: the unprecedented 50-year contract, which allegedly violates a clutch of national laws and policies related to housing, the urban poor, conservation of cultural heritage, and the cooperative movement.

[5] CLAIMS THAT ALMOST SHOCK. Is it true, as alleged in the lawsuit, that 90 percent of the properties involved in the Carbon project are not owned by the City?

There was talk before about a part of the total of 7.8 hectares of land in the Carbon project is owned by the national government. But 90 percent is bit of a shocker. If true, that could mean the City is doing business with a private company and using land that almost totally is not within its "dominion."

The other "drumroll-please" claim is that the City Council did not validly pass an ordinance that approved the JVA and authorized the mayor to sign the document. That seems quite a stretch as the records say the Sanggunian indeed approved the ordinance last January 6 and affirmed its action in the next session. The complainants are dangling legalistic hyperbole or they have the evidence to prove it.

[6] MEGAWIDE'S UNCHANGING MESSAGE. In response to the report of the lawsuit, MW last Thursday, August 26, repeated what it earlier said: It "has complied with all applicable laws, rules and regulations" in undertaking the Carbon project. It "places priority on the needs of various stakeholders, especially the vendors" and it has incorporated in the project "most if not all the suggestions by vendors and other market stakeholders."

No mention of VM Rama's mantra to "cure the defects," but the statement promised "to continue to follow the directives of Cebu City with respect to vendor space and welfare."

In a June 7 Explainer, Megawide summed up its message, thus: Carbon Market project has no defects, will bring big economic benefits for the city and province, but the private partner will keep lines open to Sanggunian and the public. Those lines of communication are now rerouted to the courtroom, where lawyers will do most of the communicating.

[7] CONTRASTING VISIONS FOR CARBON. Megawide promises "to inclusively promote Cebu, not just nationally but to the world, and spur more economic activity for the city and province." It will place priority on the needs of stakeholders, who "play a vital role in ensuring that Carbon's distinct history and culture are not only retained but enhanced."

On the other side, the complainants say they "envision a modern economic hub," admitting that Carbon market needs improvements in facilities and management. They want it to continue as "source of livelihood for 6,000 vendors and home for 1,000 families."

The court petitioners apparently disagree with the thrust and methods of the JVA partners. They reject the MW-City plan to make Carbon an international tourist attraction and commercial center. Carbon, to the complainants, is the local primary source of cheap goods, which will vanish with the "profit-driven" sites and facilities under the plan.

Could a court battle resolve that? A referendum might determine more accurately what city residents want to do with Carbon.

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