Lapu signs deal for P25B skyway

·5 min read

AFTER facing rough sailing at the City Council last year, with allegations of politics hurled into the mix, the P24.8 billion Lapu-Lapu Expressway (LLEX), also known as the skyway project, is expected to begin construction next year.

This after the Lapu-Lapu City Government, represented by Mayor Junard “Ahong” Chan, and LLEX Corp. president Manuel Gonzales Jr. signed a memorandum of agreement (MOA) during the city’s Charter Day at the Session Hall on Friday, June 17, 2022.

The signing was made after the City Council approved on mass motion on June 9 the resolution to allow Chan to enter into a joint venture agreement (JVA) between the city government and LLEX Corp. composed of Premium Megastructures Inc., Ulticon Builders Inc. and MTD Philippines Inc.

Lapu-Lapu City Councilor and lawyer Michael Dignos, who was among those who opposed the project, told SunStar Cebu that they approved the resolution with all the amendments to the JVA. One of these was the contract period, which is now 35 years and may be extended by 15 years upon the request of the proponent.

Dignos said the share of the City in the toll revenues will also increase gradually from one percent to 2.5 percent.

“Proponent is not granted automatically exemption from taxes but (this) must be requested and left to the discretion of the SP (Sangguniang Panlungsod),” he said.

Apart from that, the road right of way (RROW) acquisition period was increased to 180 days instead of 90 days while the free service road must be constructed by the proponent once the general aviation road is closed and used for the expressway.

“Any and all roads directly affected by the LLEX must be provided with free service road,” he said.

Dignos added that the owners of all houses and structures affected must be properly compensated.

He also noted that the management board shall be composed of the following members: five from the JV partner, three from the City, and one independent member.

Rejected

Reelected Lapu-Lapu City Vice Mayor Celedonio “Celsi” Sitoy said the City Council, the majority of which belongs to the opposition bloc, had initially turned down the resolution three times.

The opposition majority had raised issues on the proposed deal to be entered into by the City, including that the City will receive only a one percent share of the project proceeds; the lack of access road that could connect the project to other barangays and that barangays affected by the project were not consulted.

Dignos also earlier questioned the provision in the JVA that would exempt LLEX from paying business and real property taxes for 50 years since there are no ordinances that allow such exemption.

Dignos added that there are incentives given to investors, but these would not reach a 50-year time frame. For instance, the Philippine Board of Investments gives only six years for tax holiday.

The LLEX aims to solve the traffic congestion on Mactan island, particularly in Lapu-Lapu City, as they target to serve about 50,000 vehicles per day. It is expected to be operational by 2025.

It will be a four-lane, 12-kilometer toll road on Mactan Island.

LLEX will connect the Cebu-Cordova Link Expressway which ends in Gabi, Cordova to the Mactan-Cebu International Airport in Lapu-Lapu City.

Chan reiterated that the City will not spend for the construction of the skyway project.

The LLEX is expected to provide economic returns worth P66.5 billion over a 50-year period.

The City would earn about 40 percent of the JV’s gross commercial revenues.

Apart from that, the City’s share in the gross toll revenues would be one percent in the first to the 15th year, rising to 1.5 percent in the 16th to the 25th year, two percent in the 26th to 50th year, and 2.5 percent should there be the extension period from the 36th to the 50th year.

During its session last Dec. 9, another issue the Council’s opposition bloc raised was the City’s obligation to pay up to P1 billion if the local government could not perform its obligations under the JVA.

Dignos said then that the City’s obligations included the responsibility to secure the Certificate to Operate from the Toll Regulatory Board, create a MOA with the Mactan airport authority and the Department of Public Works and Highways, and process the acquisition of road right of way.

Mayor Chan said then that the opposition councilors had no authority to question the project because they were not present at the Dec. 6 public hearing, which he said “they boycotted” because “that was the order given to their group.”

Chan said politics was the main reason the project was being delayed since the opposition did not want the LLEX to be built during his administration.

Chan won reelection against Lapu-Lapu City Rep. Paz Radaza in the May 9 elections.

Last Dec. 14, Councilor Flaviano Hiyas Jr. also said the project cannot solve the traffic problem in the city since only 44 percent of the LLEX would be elevated as a skyway with the rest going along the existing road.

“This is what I fear, that instead of alleviating traffic within our circumferential road, it will aggravate it,” said Hiyas Jr.

It is unclear if these other concerns have been addressed in the JVA.

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