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Probe of ’onerous’ deals widens

Another contract will be scrutinized by President Rodrigo Duterte after Salvador Panelo, his spokesman and chief legal counsel, sought the review of UP Ayala Land Technohub’s lease agreement which, he said, appears to be disadvantageous to the government.

Panelo on Tuesday said he would recommend the review of the agreement between Ayala Land Inc. and University of the Philippines Diliman since the rent being paid by the company seemed low.

He was referring to the 25-year lease deal in 2006 that said the development and conversion of the 20-hectare land across the UP Diliman campus along Commonwealth Avenue for the Technohub, which serves as a “low-density complex” for business process outsourcing firms.

Ayala Land said the lease rate paid to UP was P171 per square meter, bigger than Panelo’s claim on Sunday that it was merely P20 per square meter.

In a statement, Ayala Land said “UP will receive a total value of P171/square meter/month. This was derived from P4.23 billion in lease payments and P6 billion investment in 16 commercial buildings for a total amount of P10.23 billion over the life of the 25-year contract. 

“After 2033, UP as owner will receive 100 percent of the buildings’ rent. UP also continues to own the land which has appreciated in value since the start of the partnership.

But Panelo said the P171 rate per square meter was still paltry and disadvantageous to the government.

“It looks like the government is on the losing end of this deal, he said.

Reacting to Panelo’s claim, Ayala Land said it welcomed a “transparent review” of its lease contract with UP.

Ayala Land said the Technohub complex will yield a total of P10.23 billion in lease payments to the state university and when the contract lapses in 2033, UP will own all buildings in the complex including rights for collecting all rental fees.

“We believe this development has been fruitful and beneficial for UP, ALI and the community,” Ayala Land said. 

The Ayala Group has been under hot water after President Duterte repeatedly assailed its subsidiary Manila Water Co. Inc., one of the two major water concessionaires in Metro Manila, for its alleged onerous 1997 agreement.

Last Friday, Duterte said he would also review the Manila Light Rail Transit contract, where the Ayala family is also involved.

The consortium of Ayala Corp. and Metro Pacific Investments Corp. of tycoon Manuel V. Pangilinan took over in 2015 the operations of LRT Line 1, the first elevated commuter train in Metro Manila that stretches from the Muñoz station in Quezon City to Baclaran in Pasay City.

The President had earlier vowed to “correct” all government contracts with private firms before he stepped down from office in 2022.

He specifically tasked the Office of the Solicitor General and the Department of Justice to check all existing contracts with the private sector.

Topics: Rodrigo Duterte , Salvador Panelo , UP Ayala Land Technohub , Ayala Land Inc.
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