FOOD TERMINAL INC TO BE SOLD IN PARTS
Manila, July 14, 2003 By Des Ferriols (Star) The government has finally junked the wholesale privatization plan for the Food Terminal Inc. (FTI), but officials said the contracts of existing tenants would be reviewed and renegotiated to adjust lease rates to current market rates.
The Department of Finance (DOF) said over the weekend that instead of disposing of the FTI property as a whole, the government would instead sell only some of the vacant portions of the industrial estate while the onerous contracts would be allowed to lapse.
Finance Undersecretary Eric O. Recto told reporters over the weekend that the wholesale disposition of the FTI, a plan that has been pending since the Aquino administration, proved to be "impossible and complicated."
The FTI was originally marked for privatization as the government decided to transfer assets and operations that it deemed better left to the private sector. This way, the government would be able to cash in on the civil works that are already in the location, such as the existing road networks and common-use facilities such as treatment facilities for agricultural products and storage facilitites that the government has already put in.
The master plan for FTI was supposed to generate billions of pesos in privatization proceeds since it is a huge property in a prime location.
There was even a plan during the Aquino administration to securitize government’s interests in FTI if the property itself could not be sold outright. The existing tenants would be allowed to buy into FTI or, if they preferred, buy out the lots they were occupying while the government would continue collecting fees from the use of the common-facilities.
However, the resistance against the plan had dragged on through four administrations, mainly due to the opposition mounted by existing tenants, some of whom still pay lease rates way below market rates.
According to Recto, the most that the DOF could do was to dispose what could be immediately disposed of, while reviewing the existing contract of all the tenants in the food processing zone.
Recto said the mixed-approach was proposed by the FTI management, involving the review of the contract while earmarking certain portions for sale. The zone itself and as a whole, would remain under government control and management.
"The new approach is a combination of continuing with certain leases and selling certain portions that we still have to identify," Recto said. "Initially, the blanket policy is that if the lease rentals are based on current market rates, we wont have no problems honoring their lease contracts."
Reported by: Sol Jose Vanzi
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