The Baguio City Council has invited the National Power Corporation (NPC) and the Power Sector Assets and Liabilities Management (PSALM) Corporation for a forum on April 11, 2022 to thresh out issues regarding the property to be purchased by the city government located at North Sanitary Camp Barangay.
In 2021, the city government and PSALM Corp. agreed to execute a memorandum of agreement (MOA) for the purchase of the property worth P36,046,003.80 as well as a deed of transfer and conveyance.
By virtue of Republic Act No. 9136 (Electric Power Industry Reform Act of 2001 or EPIRA Law), PSALM Corporation was created to take ownership of all existing generation assets, liabilities and Independent Power Producer (IPP) contracts, real estate and all other disposable assets of the NPC, among others, and to manage the orderly sale, disposition, and privatization of said assets.
Included in the former assets of NPC that were transferred to PSALM are the 10 parcels of land at North Sanitary Camp Barangay with a lot area of 6,332 sqm. more or less which are covered by transfer certificates of title (TCT).
In pursuit of its mandate, PSALM intends to sell and transfer the said property “in an optimal and for the best interest of the government.”
The Baguio Sewage Treatment Plant (BSTP) is located within this property. According to PSALM, it is the most ideal location of the BSTP and that it is crucial for the city government to keep the sewage treatment plant operational as it serves the entire City of Baguio.
However, the said property is a subject of a case filed by the NPC in 2008 against the city government before the Regional Trial Court Branch 61 for the recovery of possession of real properties with damages including back rentals. The case docketed as Civil Case No. 6801 is still pending in court.
Earlier, the city government appealed to PSALM for the deletion of a provision in the MOA that states that the sale is without prejudice to the claim of the NPC for back rentals covering years prior to PSALM’s decision to sell the property.
In her letter to Mayor Benjamin Magalong, PSALM President and CEO Irene Joy Besido-Garcia argued that the [trial court] should be allowed to decide on the case and that the price of the property is only for the purchase of the land and does not cover NPC’s claim for back rentals.
“If said provision is removed, the sale of the Baguio Property to the LGU-Baguio might be wrongly construed as having settled the matter of back rentals, when in fact, only the market value of the land had been taken into consideration by the parties,” Besido-Garcia stated.
The PSALM president also called for the amendment of the resolutions passed by the city council authorizing Mayor Benjamin Magalong to enter into a memorandum of agreement with PSALM for the purchase of the property and a deed of transfer and conveyance.
Among Besido-Garcia’s proposed amendments is the removal of a clause in the resolutory portion of the resolutions which states that “this document shall serve as a basis for a Compromise Agreement to be entered into in Civil Case No. 6801.”
She stressed that the said provision is not in line with the intention of the parties to enter into the sale and transfer of the property which does not include the settlement of the back rentals.
However, during the council session on March 28, 2022, Councilor Betty Lourdes Tabanda argued that it is best to retain the said provision in order to “protect the interest of the city.”
“We were of the understanding that once we purchase the property, the case should be dismissed and that we should present these resolutions as a basis for the dismissal of the case,” Tabanda said.
Agreeing with Tabanda, Asst. City Legal Officer Melchor Carlos Rabanes said that the agreement between NPC and the city government is that the NPC should relay to PSALM that the city government intended to buy the property.
“Once we buy the property, the case should already be dismissed,” Rabanes said.
He mentioned two court orders from the RTC stating that the NTC would move for the dismissal of the case once the transfer of the property was finalized and submitted. The court orders were archived in February 2022.
Rabanes also revealed that the property is still in the name of the NPC. He claimed that the NPC and PSALM had not yet arranged the turnover of the property.
According to the PSALM’s 3rd Quarter Monitoring Report which was uploaded on its website, the NPC wrote the PSALM a letter stating that the former deemed it proper to defer the turnover of the TCT of the property until the case is resolved.
“We are caught between the devil and the deep blue sea… NPC and PSALM should get their acts together,” Rabanes exclaimed.
In his letter dated February 11, 2022, Magalong urged the city council to quickly act on the matter as the delay in the payment of the mutually agreed price between the city government and the PSALM may have some “cost implications.”
“This has been dragging on for over a decade and now is the most opportune time to put to rest the matter of ownership of the land, so that we can already focus on our urban wastewater management,” Magalong stated. **Jordan G. Habbiling
