Former Pagcor chairman Cristino Naguiat is standing firm that the multi-billion lease contract for the Army Navy Club property in Manila is legal and aboveboard, and will even save the government P187 million a year compared to a lease contract with a hotel owned by the Gatchalian family.
Naguiat said the government is also expected to earn about P59.17 billion in revenues from the casino and gaming facility to be built by Vanderwood Management Corp. at the Museo Pambata Complex in Roxas Boulevard.
“Not only is the transaction completely legal, but it is also highly beneficial and advantageous to the Filipino people—as the transaction translates to savings for Pagcor in the amount of at least P187 million annually and projected revenues in the amount of P59.17 billion,”Naguiat said.
In a position paper he submitted to the House committee on good government and accountability looking into the controversial Pagcor-Vanderwood contract, the former Pagcor chief said the 15-year lease the government agency entered into with Vanderwood went through the proper and legal processes.
The committee, chaired by Surigao Del Sur 2nd District Rep. Johnny Pimentel, has started an inquiry into the alleged highly anomalous P13 million per month lease of Pagcor of a portion of the Army Navy Club property to Vanderwood where a casino will be put up.
Lawmakers have questioned Pagcor’s move to pay Vanderwood P234 million in advance rental payment even as the gaming facility has yet to be constructed at the site.
The city government of Manila originally leased the property to Oceanville Hotel and Spa Corporation for P300,000 a month and the company in turn leased the same to Vanderwood for the same amount, which lawmakers claimed is highly irregular.
Naguiat, however, insisted that Pagcor did not violate any law as attested by the Office of the Government Corporate Counsel that looked into the transaction.
Compared to the P28 million monthly rental Pagcor pays to Acesite Hotel Corp. for the existing casino at the Manila Pavilion, Naguiat said the P13-million-a-month rent to Vanderwood is P15.59 million lower, translating to a yearly savings of P187.10 million.
Acesite is owned by the family of businessman William Gatchalian, whose son Kenneth T. Gatchalian sits as President and Chief Operating Officer.
Of the 57 prospective lessors, including Acesite, only Vanderwood submitted the Single Calculated Responsive Quotation, which Pagcor’s Bid and Awards Committee found to be sufficient; BAC subsequently awarded the lease contract to Vanderwood, according to Naguiat.
“BAC noted that the terms offered by the prospective lessor were the most advantageous and beneficial to Pagcor,” Naguiat said, noting that Vanderwood’s offered rental rate of P2,000 per square meter is much lower than the existing rental rate of P2,621.78 per square meter considering the facilities at the planned casino is much newer and fully fitted.
As to the P234 million paid to Vanderwood representing 12 months’ advance rental and six months’ security deposit, Naguiat explained Vanderwood posted a P1-billion bond and issued a signed and undated check payable to Pagcor in the amount of P234 million.
This, he said, is “to safeguard the payment of Pagcor in case of non-delivery of the Leased Premises or non-acceptance.”
Naguiat also stressed that the undated check ensures that the advance rental and the security deposit of P200-million Bank Guarantee and P100 million in cash will not be retained by Vanderwood should it fail to put up the casino.
The former Pagcor chairman surmised that “critics” of the transaction do not have sufficient familiarity with the procurement process and the Contract of Lease’s terms and conditions.
“They are led to erroneously believe that the transaction is irregular and disadvantageous to the government,” Naguiat said.