A Capitol-hired consultancy firm on Tuesday submitted to Governor Hilario P. Davide III its proposed financial preferences that would aid the Capitol in materializing the P775-million building project set to be built within the Provincial Government compound.
A.S. Enriquez Engineering Consultancy (ASEEC) President Apollo Enriquez said they offered four options to Davide for the proposed building that will house the office of the Provincial Disaster Risk-Reduction Management (PDRRMO), extension offices and commercial spaces.
According to Enriquez, the preferences include utilization of its own fund, loan application, public-private partnership or build-operate-transfer scheme (PPP/BOT), or enter into a joint-venture agreement (JVA) with a private institution.
The consultancy official also showed the advantages and disadvantages of each option.
In the first scheme, Capitol will have to spend from its own coffers for the construction of the building, thus leaving the province with no obligation from any financial institution after the project.
But with this preference, a significant portion of the budget will be used, affecting some basic services of the provincial government.
Applying for a loan, Enriquiez said, will take time due to numerous requirements. But since Capitol already has credit standing in another transaction, producing most of the requirements will be easy.
However, the firm’s official cautioned that financial credit will entail annual budgetary outlay to pay the loan including its operation and maintenance.
In a PPP scheme, Enriquez explained that it entails more time as the process will have to include regional as well as national approval.
Capitol, he said, will not spend any single amount of money but will receive its share of revenues.
Under this scheme, it is the private partner who decides the rate of the province’s share. Usually at the end of the PPP contract, some 20 or 30 years later, the building may diminish its market value.
Enriquez said a JVA is more agreeable since the province already has existing joint venture agreement ordinance.
However, the consultancy official said that the province must pass another specific ordinance on a joint venture for a particular private firm it will engage with.
After all options are presented, Enriquez said it is now up to the governor to decide.
Meanwhile, Davide instructed the local finance committee (LFC) members and Enriquez’s finance managers to meet again and discuss in details each option to come up with the best scheme for Cebu.
Last year, the Cebu Provincial Board ratified the services of ASEEC for P57 million where the firm is tasked to do a feasibility study of the project, detailed architecture and engineering design, including the construction supervision of the mixed-use building.
The proposed site of the complex building is on the area where the condemned Baex building now stands.