The Japan International Cooperation Agency (JICA), which granted the multibillion-peso loan for the South Road Properties (SRP), has approved the change of its development plans from a manufacturing zone to a mixed-use development project.
Cebu City Mayor Michael Rama said JICA’s concurrence of the city’s plans will enable the city and SRP investors to continue plans for the SRP, which include hotels, shopping malls, convention centers and residential buildings.
However, JICA’s South Asia I and Pacific Department director general Koki Hirota reminded Rama of the original objective of the reclamation project, “which is to generate employment and to contribute to the economic development of Cebu City.”
“There is just one clarification that we want to raise regarding the revisions made in the negative list, particularly the deletion of gambling, golf course and motor sports,” he said.
“Kindly take note that JICA remains firm in the position of the former JBIC (Japan Bank for International Cooperation) that the above-mentioned investments should not be allowed in the SRP as this would be inconsistent with the philosophy of our development aid. Hence, we would like to request the city to retain these under the negative list,” Hirota said in his Aug. 2 letter to Rama.
Officials of the Land Bank of the Philippines, the conduit bank for the city’s loan from JICA, were also given a copy of the letter.
JICA lent the city 12.315 billion yen in 1995 to implement the South Reclamation Project, which is now the South Road Properties. The loan is payable in 30 years, ending in 2025.
An additional 1.28 billion yen loan was made to pay for the accrued interest of the first loan during the construction period.
The 302-hectare reclaimed property was originally intended for an industrial and export zone for light manufacturing firms, and was aimed at reducing poverty and accelerating economic growth in Metro Cebu.
The project was envisioned to generate 80,000 new jobs. But because the manufacturing industry has slowed down with some export companies closing shop in the late 1990s, the city shifted to a mixed-land use for the SRP, with some portions sold to Filinvest Land Inc. and SM Prime Holdings Inc. for hotels, residential buildings and commercial centers.
“JICA has no objection to the revised SRP Conceptual Plan proposed by the City government, which essentially is a prime mixed land use facility. We recognize the original plan to develop SRP into an export processing zone is no longer realistic. Thus, we find the proposal of the city to re-position SRP to meet market demands basically acceptable,” Hirota said.
Rama said the letter from JICA means it is allowing all the proposed projects in the plans of the Cebu Investment and Promotions Center (CIPC), including those of Filinvest and SM.
He said the city will abide by the conditions of the loan as much as possible, including the prohibition on the operations of casinos, golf courses and motor sports.
“They do not like the SRP to be converted into a casino, no water sports and golf course… They cannot stop us from doing so, but of course we would not wish to displease the source of our funds for the SRP because we might not be able to ask for funds in the future… unless it’s very necessary, because we also need to pay for our loan. Right now we don’t even have to discuss this yet,” Rama said.
Cebu City Planning and Development Coordinator Nigel Paul Villarete said they have already ironed out the matter and have agreed with JICA that gambling facilities, motor sports and golf courses are still in the negative list of investments.
“That’s not a problem anymore, that’s been agreed on. So basically, everything is okay. The latter has given a 100-percent imprimatur to whatever we are doing now. It proves to everybody that JICA approved the city government’s plan for the SRP, contrary to what some people say,” he said.
In the same letter, Hirota reiterated JICA’s stand on the importance of a well-structured SRP Management Office and to equip its staff with the necessary knowledge and skills in managing a large-scale urban development.
He also asked for updates on the city’s negotiations with service providers for utilities, such as power, water and waste management facilities, as well as updates on the technical assistance of other funding agencies for the SRP to avoid duplication of the projects that JICA might also fund in the future.