DRILON BARES MIDNIGHT, GROSSLY DISADVANTAGEOUS DEAL BETWEEN IBC-13, CONSTRUCTION FIRM

Senator Frank Drilon on Monday said that the Intercontinental Broadcasting Corp. (IBC-13), which Malacañang said will be sold, is already the subject of a joint venture agreement which is clearly a midnight deal that is grossly disadvantageous to the government.

Drilon said the state-run broadcasting network and a construction company has inked an agreement for the transfer of prime assets in favor of a construction firm. Drilon learned the joint venture agreement dated March 24, 2010 between IBC-13 and R-II Builders Inc. / Primestate Ventures Inc. has not been subjected to review by concerned state agencies.

"This is in effect a midnight deal considering the dates when the approvals were made," Drilon said, citing the approvals made by the Office of the Government Corporate Counsel last March 23, Presidential Commission on Good Government last February 19, and Office of the Solicitor General last February 26, which found no legal impediments for the agreement.

But Drilon said that the joint venture failed to secure the mandatory review of the Privatization Council pursuant to Section 3 of Executive Order No. 323, which constituted an Inter-agency Privatization Council and Privatization Management Office under the Finance department.

Under the joint venture agreement, IBC-13 will transfer the ownership of 3.64 hectares to R-II Builders / Primestate, out of the 4.14-hectare property.

Drilon said the valuation of the 3.64 hectares was pegged at only P9,999.99 / square meter or a total of P364 million, considering that the land is located in a prime location. He added that the valuation was not submitted to the Commission on Audit - Technical Services Office for review.

However, Drilon said the valuation should reflect the true market value of the property.

Presidential Communications Operations Group chief Herminio Coloma said sequestered television stations RPN-9 and IBC-13 will be sold in two years.

But Drilon warned the government against disposing off of properties without getting necessary clearances and a thorough review and called for the reassessment of the agreement.

"We caution Secretary Coloma to carefully review the joint venture," Drilon said.

The joint venture, a 15-year agreement, seeks to develop, finance and design the proposed Broadcast City Compound composed of a new six-storey IBC-13 Corporate Building, a new two-storey commercial building, road network and parking spaces, and medium-rise residential buildings.

R-II will build residential condominium units and the 3.64 hectares will be transferred in its name. In effect, IBC-13 will be left with only 5,000 square meters of property, six-storey building and a two-storey commercial complex with about 15 units or so to lease.

The state network will receive a Guaranteed Share in Revenues in the amount of P728 million�P150 million cash payable in six equal tranches, P450 million to be offset or to be used to compensate R-II Builders / Primestate for the construction of the new Broadcast City, roadways and the other structures, and P128 million to be paid in two equal tranches.

"This is grossly disadvantageous since only P278 million will in effect be received by the government," Drilon said.

The P728 million which is made to appear as the government's share in the revenue is a farce because P450 million will be used to compensate R-II Builders," Drilon said.