Philippine Billionaire Sy Wins $1.2 Billion Reclamation Project
The government of Pasay City, where the 300 hectares (741 acres)-site is located, signed a joint-venture agreement with SM Land Inc., a property company owned by Sy, Severo Madrona, legal officer and vice chairman of the selection committee, said in a statement on its website. The committee didn’t receive “any competing proposal from any qualified bidder,” according to the statement.
The site to be reclaimed is next to the 60-hectare Mall of Asia complex, the single-biggest property in Manila for SM Land, and about 5 kilometers away from Ayala Land’s Ayala Center, the nation’s main business and financial district. Ayala Land said Oct. 31 its petition to extend the Nov. 4 deadline by 60 days to submit a competing bid was denied by the local government.
“The bay area will be the country’s gaming and tourism hub,” said Richard Laneda, an analyst at Manila-based COL Financial Group Inc. The investment “makes sense for both as it will expand SM’s presence in Manila Bay. For Ayala, this means gaining a foothold in the area.”
All reclamation projects will have to be approved by the National Economic and Development Authority, which is expected to follow its 2013 guidelines on joint ventures and consider questions Ayala Land has raised, Chief Operating Officer Bobby Dy said in a statement.
“If various issues, including environmental concerns, are satisfactorily addressed, and an open and competitive bid is conducted for the project, ALI will participate,” Dy said.
Shares of SM Prime Holdings Inc. (SMPH), parent of SM Land, rose 2.4 percent to 16.40 pesos at the close in Manila, its biggest gain this month. Ayala Land increased 0.7 percent, compared with the benchmark Philippine stock index’s 0.6 percent gain.
Ayala Land has said the development authority’s guidelines for joint ventures, which took effect in May, allow interested parties up to 120 calendar days to submit proposals. Local government have the discretion to implement joint-venture guidelines based on its own determination rules, Madrona said in the statement.
“There’s nothing illegal when it comes to the processes or procedures followed,” Madrona said in the statement.
SM Land will fully finance the project and will allocate 51 percent of the reclaimed area to the government, according to the statement. The development is expected to be completed in seven years, it said.
“We are committed to abide by all government laws, regulations and processes,” SM said in a statement confirming that it’s been issued a notice of award.
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