Domingo: License could be invalidated
Philippine President Rodrigo Duterte has ordered government officials to take a second look at Landing International’s lease on a parcel of land to be developed as an integrated resort in Manila’s Entertainment City.
According to GGRAsia, the country’s Department of Justice will review the land lease contract between the Nayong Pilipino Foundation, the government-run entity that made the deal, and the Hong Kong-listed developer.
On August 7, shortly after Landing and NPF broke ground at the proposed $1.5 billion NayonLanding complex, Duterte fired the whole NPF board after allegations that it orchestrated a sweetheart deal for Landing Resorts Philippines Development Corp.
“The president has instructed a review of the contract of lease, which he described, in his own words, as ‘flawed’,” said presidential spokesperson Harry Roque in a statement. “It was entered into without public bidding and was disadvantageous to the government.”
“There was no bidding, it did not undergo proper process,” said Maria Fema Duterte, a NPF board member who is related to Duterte by marriage. “The board members did not publicize or put it to challenge of other investors for comparison,” she said.
But Landing insists its lease is legal and the dismissal of the NPF board does not affect the planned US$1.5 billion development. “From the group’s viewpoint, the recent decision of the Philippine government to replace members of the NPF board of trustees did not affect the validity of the subject contract,” said a statement.
In 2014, NFP signed a no-bid 25-year lease with Resorts World Bayshore City Inc., a unit of Travellers International, for the 5.4-hectare (13.3-acre) plot, where a family-friendly integrated resort was to be built. According to Landing International Chairman and Executive Director Dr. Yang Zhihui, the resort would showcase “the uniqueness of Filipino-inspired architecture and interior designs, and the leisure and entertainment facilities in the resort shall incorporate Filipino culture and heritage. This family-oriented facility promises a distinctly different must-see and must-experience destination, capturing the hearts and minds of domestic and foreign visitors of all ages.”
He said the IR would employ about 10,000 people, mostly locals, and draw an additional 2 million to 3 million international visitors to per year once the resort opened in 2022. The word “Nayon” means “small village in Tagalog.
A draft version of the lease included a term of 50 years subject to approval from the country’s Tourism Infrastructure and Enterprise Zone Authority. The lease provisions were amended in July, increasing Landing’s monthly rental fee by 140 percent and cutting the initial lease period from 50 to 25 years. Under the agreement Landing would pay rent of nearly PHP34.5 million (US$650,050) per month to the NPF, which would also receive 10 percent of the net profit after tax from the operations of theme parks at the resort.
“To the best knowledge of the company, the lease is legal, valid and enforceable,” said Landing.
After the mass firing, ousted NPF head Patricia Ocampo denied any wrongdoing in the land deal, calling it “above-board and highly advantageous to the government and to the Filipino people.” The Philippine Amusement and Gaming Corp. confirmed on July 26 that it had granted a provisional gaming license to Landing Philippines.
But PAGCOR Chairwoman Andrea Domingo said the license is only valid if the lease is. “The provisional license is precisely conditioned upon continuing compliance with all the legal requirements and existing limitations of government, including the presence of a valid lease contract between the parties concerned for the establishment of a Filipino heritage theme park-cum integrated resort casino in Entertainment City,” she stated. “PAGCOR reaffirms its commitment and readiness to support the policies and pronouncements of the president pertaining to the country’s gaming industry.
Meanwhile, according to the Philippine Star, the officials behind the lease deal could face criminal charges. “We expect a prompt investigation and filing of charges against them,” Roque said in a radio interview. He added that those found guilty of graft may be punished with lifetime imprisonment. “It depends on the amount. The case may even be upgraded to plunder.”
Duterte also reiterated that no casinos would be developed in the Philippines “outside of what was existing.” That includes the holiday island of Boracay, which will reopen in October following a months-long environmental cleanup, said Tourism Secretary Bernadette Romulo-Puyat.
Puyat said Duterte “has even instructed the Department of Tourism to close down the existing casinos in the island. So there will be no casinos at all in Boracay.”
But Rep. Gus Tambunting, chairman of the House Committee on Games and Amusements, countered, “I do not believe the Department of Tourism can shut down existing casinos for the simple reason that PAGCOR has primary jurisdiction over all casinos, not the DOT. The concerned government agencies must act within their jurisdiction.”
Macau gaming operator Galaxy Entertainment Group had planned to develop an integrated resort on the island, and as recently as August 8, Vice Chairman Francis Lui continued to tell reporters that the provisional license granted to Galaxy by PAGCOR means the company can develop a gaming resort there.
