Negros Occidental Governor Eugenio Jose Lacson has issued a notice to terminate a provincial government joint venture agreement that has allowed a private firm to manage its Negros First CyberCentre in Bacolod City.
Lacson, in a letter to Salvador Enriquez Jr., chairman of the Negros Property Management and Development Corp., said they are terminating the JVA with NPMDC for being grossly disadvantageous to the economic interests of the provincial government.
The governor said it has been more than four years since the JVA was executed between the provincial government and NPMDC for the latter to maintain the Negros First CyberCentre, create a viable environment for all tenants, and promote economic activity through potential investors.
However, he said, recent events have come to his attention that require the termination of the JVA.
The equity participation of the provincial government is not commensurate with the capitalization it infused considering that the provincial government owns the Negros First CyberCentre and the four-hectare property where it is located, Lacson said.
He pointed out that Section 4, Article III of the JVA requires that two-thirds votes of the JV Board is needed to rule on important matters.
The provincial government clearly does not retain control considering that it has only 49 percent of the equity and retains two of the six Board of Director seats, he said.
Lacson said the minimum annual remittance of 20 percent by the JV Corp. of the gross revenues but not less than P15 million is not economically profitable to the provincial government.
The amount barely covers the amortization of the loan for the construction of the Negros First CyberCentre, he said
When the provincial government was impleaded as a necessary party in a labor case against the JV Corp., it was also revealed that in 2017, the corporation paid P16.6 million to CPRM Consultants Inc. for a feasibility study it conducted for Phase 2 of the development at the site.
It came as a surprise that CPRM is also a major stockholder of NPMDC that owns 51 percent of the JV Corp., Lacson said.
It appears that there are interlocking directors between JV Corp. and CPRM, he pointed out.*