THE Commission on Audit has questioned the Bases Conversion and Development Authority (BCDA) for its failure to collect revenue shares from Megaworld Corp. totaling P2.62 billion, not counting interests and penalties, concerning a 32.86-hectare property in Bonifacio Global City in Taguig City.
Government auditors noted that BCDA last collected its minimum annual secured revenue share (MASRS) of P873.414 million from the property developer in 2017.
From 2018 to 2020, the unpaid amount has ballooned to P2.62 billion with interest due totaling P450.825 million and penalty on delayed remittance in the sum of P103.317 million for 2011 and 2012.
The COA pointed out the money could have also provided additional cash inflow to the BCDA if placed in high-yield treasury notes.
Records showed the BCDA and Megaworld entered into a joint venture agreement (JVA) on April 13,2010 for the privatization and development of a 34.5-hectare land previously occupied by the Joint U.S. Military Assistance Group (JUSMAG) in Taguig City.
Under the agreement, the land was BCDA’s sole contribution while Megaworld committed to invest at least P22 billion over 20 years to develop the area into a mixed residential and mixed-use property.
Section 16 of the JVA states that Megaworld was supposed to remit P873.414 million to the BCDA as MASRS starting April 12,2011 and every year for 23 consecutive years.
The period was later reduced to only 19 years due to the exclusion of the 1.64-hectare portion in Maricaban Creek from the JVA.
“Our audit for CY 2020 revealed that despite management’s commitment to exert all efforts… it was still not able to collect the MSRS of P873.414 million each for CYs 2018 to 2020 or a total of P2.62 billion,” the COA said.
The BCDA has also failed to provide COA updates and documents on the status of its negotiation with Megaworld, neglecting its previous assurance to continually apprise the audit team.
The COA ordered the BCDA to enforce the collection of MASRS and to fulfill its commitment to provide updates on its negotiations with Megaworld.
In its comment to the audit observations, the BCDA said it is pursuing the collections of revenue shares by the issuance of a statement of account to Megaworld on March 4,2021 demanding payment of the amount due.
As of April 2021, it said the unpaid MASRS has reached P3.494 billion on top of penalty interests of P493.18 million.
It said it has already sat down with the Office of the Government Corporate Counsel (OGCC) to discuss a possible Dispute Resolution Agreement.
