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‘Grandmother of all scams’ continues: COA blocks P1B settlement between PRA, Amari successor

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The Commission on Audit (COA) has blocked the Philippine Reclamation Authority’s (PRA) October 14, 2016 compromise agreement that would transfer 102,703.15 square meters of reclaimed land to an assignee of the successor company of Amari Coastal Bay Reclamation and Development Corporation as reimbursement for the sum of P1.01 billion.

In a recent 9-page decision, the COA ruled the settlement illegal because only Congress has the power to compromise claims exceeding P100,000 as provided by the Administrative Code of 1987.

The deal was meant to reduce the claim of Central Bay Reclamation and Development Corporation—the successor of Italian-Thai firm Amari—from the P11.53 billion it demanded for its cash advances to PRA, project development costs, professional fees, expenses in relocating informal settlers, and interests in bank loans.

Reducing the claim to P1.01 billion “may appear advantageous to the government,” but the COA stressed that “PRA has no authority to compromise.”

Besides, the COA found that Central Bay only had a valid claim to P714.94 million. It denied most of the demanded amount for lack of legal basis, for insufficient supporting documents, or for being unrelated to the project.

It deemed most of the amount to be part of Central Bay’s obligation to finance and develop the project, for which the government should not be held responsible.

“Being a joint venture, Central Bay undertook the financing and development… at no cost to the government. To put it succinctly, the losses Central Bay may have entailed are part of the investment risks attached to the business venture… which it must solely bear,” the COA said.

The COA also saw the deal with Central Bay Reclamation and Development Corporation as an attempt to “circumvent” the Supreme Court’s (SC) July 2002 ruling, which declared the March 1999 sale of reclaimed and still-submerged parts of Freedom Island to Amari to be unconstitutional.

To recall, the SC said the reclaimed parts were alienable land of public domain which may only be sold to Filipino citizens and leased to private corporations. Meanwhile, the submerged parts were inalienable and outside the commerce of man.

“The parties would like this Commission to turn a blind eye on the illegality of the transfer of the land to Central Bay because it will soon be conveyed to a qualified assignee anyway. This Commission refuses to be an instrument in the perpetuation of such illegal act,” the COA said.

The joint venture between Amari and what was then called the Philippine Estates Authority (PEA) became controversial during the administrations of former Presidents Fidel Ramos and Joseph Estrada.

The late Senate President Ernesto Maceda, in a 1996 privilege speech, denounced it as “the grandmother of all scams.”

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