Seven council members, during the regular session on July 13, voted for the public-private partnership (PPP) modality, outnumbering those who were in favor of equity financing and debt financing with only four votes and one vote, respectively.
After deliberating for two consecutive sessions, the city council has finally decided which modality to endorse for the construction of the new city market.
Majority of the council members thought it best to align themselves with the recommendation of the executive body which is for the city government to forge a partnership with a private firm for the six-billion project.
Previously, Mayor Benjamin Magalong and Engr. Bonifacio Dela Peña, City Administrator and Chairperson of the PPP Selection Committee, told the city council to reach a decision urgently so the city government can move forward in its bid to redevelop the city market.
Backed by reports from the City Accounting Office and the City Budget Office, Magalong and Dela Peña reasoned equity financing (city’s own fund source) and debt financing (through loan) were financially unviable options.
During the city council’s regular session on June 29, Antonio Tabin, City Accountant, revealed the available general fund as of December 2019 is 3.89 billion. However, the same has been appropriated for city expenses, liabilities, and other purposes, thus cannot be utilized for a single project.
The financial report disputed the previous assumption that the City can generate and allot 4 billion for the city market’s rehabilitation.
Magalong also said he would not recommend a loan scheme, either, to finance the redevelopment of the public market as the City, according to him, does not have the capacity to keep up with the projected yearly amortization.
Earlier, Dela Peña revealed the City had received unsolicited proposals from two giant firms for the public market’s redevelopment.
Robinson’s Land Corporation and SM Prime Holdings Incorporated have presented their respective proposals to redevelop the Baguio City Market. Dela Peña said both proposals are currently undergoing a thorough evaluation by the city’s Public-Private Partnership for the People (P4) selection committee.
The city administrator added other companies have likewise signified interest but have not submitted their proposals and would rather participate in the Swiss challenge in which they are allowed to challenge or match the bid of the company that would receive the Original Proponent Status (OPS).
The city administrator and the chief executive stressed that both companies, Robinson’s Land Corporation and SM Prime Holdings Incorporated, proposed to construct the market building at no cost to the city.
Magalong implored the city council to consider the advantages of having a public-private partnership deal for the construction of a state-of-the-art public market. Among those advantages mentioned were increased employment opportunities, optimization of the 30-hectare land area for increased city revenue, and modernization of systems.
With the majority of the council members voting in favor of the PPP modality, the august body reiterated that the architectural designs prepared by a technical working group (TWG) during the initial planning for the project should be adopted or integrated into the architectural plan to be prepared by the winning proponent of the project.
The new architectural plan will also go through the confirmation of the council in order to ensure that the first one prepared by the TWG has been integrated. **Jordan G. Habbiling
