EXPLAINER: Proposed MOA limits properties Cebu City is bound to deliver for Carbon Market project. Land tops issues in lawsuit vs Megawide-City P5.5B joint venture.

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THE land that the P5.5-billion modernization of Carbon Market in Cebu City will use comprises not just the site of the present markets but also other adjacent and nearby lots.

The problem is that 90 percent of the land is allegedly not owned by the City Government or, perhaps more accurately, most of the land about 7.8 hectares, is not titled in the name of the City.

LAWSUIT, PROPOSED MOA. The land issue is raised in:

(a) The August 25 lawsuit seeking to stop the project, filed by an “alliance” of groups of vendors, homeowners, fisherfolk, urban poor and other “stakeholders” against city officials and officials of Megawide Construction Corp. and Cebu2World Development. Ownership of the land leads the list of issues.

(b) The memorandum of agreement (MOA) the City Council proposed last September 1st for the mayor to use in renegotiating the terms of the joint venture agreement (JVA) with Megawide and Cebu2World. In Vice Mayor Michael Rama’s privileged speech pushing the proposed MOA, the #2 issue, among five he listed as the concerns over the Carbon Market deal, is “ownership of the lands involved in the JVA.”

The land is a major component of the project. People quickly responded to the news of a lawsuit on Carbon: Could the City Government use for commercial venture lots that it does not yet own? In the language of the court petition seeking to stop the project, the City cannot use land over which it “has no dominion and authority to use in a long-term investment.”

LIMIT ON CITY’S CONTRIBUTION. The lots are the City’s “contribution” to the joint venture, its “total participation” in the project, the proposed MOA said. Under the JVA -- signed by Mayor Edgardo Labella and Manuel Louie Ferrer, Megawide infrastructure executive director, last January 11 after the mayor was earlier authorized on January 6 by the City Council -- the City shall turn over exclusive use and possession of the City lands to MW for the duration of the venture.

The court petitioners want a temporary restraining order and writ of preliminary injunction against the project. The proposed City Council MOA would have the City “only initially bound” to deliver exclusive use and possession of properties that are (a) “registered in the name” of the City and/or (b) “devoted and reserved” as site for the public market. Meaning it is obligated to deliver only the properties titled in the name of the City Government.

How much of the project site actually falls under that category is not yet known to the public but the “90 percent” description in the court document is disturbing enough.

MEGAWIDE: ‘NO TRANSFER OF OWNERSHIP.’ The private sector proponent seems to be not bothered by the issue on lots.

In a statement to SunStar Thursday, September 2, Megawide said there will be “no transfer of any property ownership to the private sector partner at any time during the project.” The City policy or objective is “to ultimately obtain title and/or ownership of the lands.”

MW must know all along that most of the lots covered by the project are not titled in the name of the City. After all, it would merely occupy and use the land and, at the end of the concession (after 50 years or more, if extended), “all the assets will revert to the LGU.”

The question though is, Could the City use land for commercial purposes if the LGU holds the land not as an owner but in some other capacity? Are there no legal limits on the use of the lots that it would now cede to a private party for business profit?

WHO PAYS FOR TITLING. While Megawide admits in its September 2 statement to SunStar that all assets will go to the City when the concession period expires, it does not mention who pays for the expenses of titling them in name of the City.

The Sanggunian’s proposed MOA does: MW shall provide funds for the titling expenses as well as for expropriation of private property for public use that may be “necessary.”

DEPENDENT ON COURT, MAYOR. A lot will depend on resolving the issue of lands on the court, whether it will grant a TRO and later mandamus against the project. Otherwise, the court litigation can drag on for years and minimally affect the project, except maybe to rattle a bit the private company’s investors.

As to implementing provisions of the JVA, the mayor has the say: whether he will heed the Sanggunian request to renegotiate the contract, using the proposed MOA as “working paper,” or sit on the plea as the executive department completes turnover of the lots.

A complication will be if VM Rama will be the acting mayor for a longer time and call the shots at City Hall. It was Rama who crafted the proposed MOA and has been advocating the cause of “curing” the JVA’s alleged defects.

‘OPEN LINES.’ In its September 2 statement to SunStar, Megawide declared anew what it said in the June 7 Explainer and repeated in an August 26 reaction to the lawsuit:

Megawide, as private sector proponent, “complied with all applicable laws, rules and procedures” of the City.

How does the firm respond to the City Council’s proposals for changes that in effect seek to replace the JVA? MW “will continue to maintain open lines” with the City Council, including the proposed MOA.

MW, not wishing to sound smug, is not saying what any lawyer knows: the JVA is a perfected contract that cannot be amended or replaced without the agreement of both MW and Cebu City, or until it is rescinded, annulled, or declared void by the court.

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