‘Contract of Lease between Tabuk City and XRC Mall Developer illegal’-Atty. Comafay

Tabuk City, Kalinga – Atty. Errol Comafay Jr., legal counsel of the Bulanao Public Market Stall Owners and Vendors and Consumers Association, claimed before the members of the Sangguniang Panlungsod that the contract of lease between the City of Tabuk and XRC Mall Developer is illegal, citing the non-compliance of the provision in said contract as reasons.

During Sangguniang Panlungsod regular session on October 14, 2021 with Vice-Mayor Bernard Glenn Dao-as presiding, Atty. Comafay was given the opportunity to cite the reasons for the said claim.

Comafay’s presence at the SP, along with several members of the Bulanao Public Market Stall Owners and Vendors and Consumers Association, was prompted after the association was alarmed with the sudden arrival of trucks carrying huge metals. They suspected that the city government is not being fully transparent on the Bulanao Market Development undertakings.

Comafay also sent a letter to Engr. Ruby Peter Albert of the City Building and Architecture Office, asking for any building permit released to seek clarification if there is an authority for the construction, but the response dated October 12 indicates that no such permit was issued.

The legal counsel in a letter also inquired why the City’s CDRRMC Boomtruck was used to unload the materials believed to be XRC’s, and whether those are for the construction of the XRC Mall “which is the subject of the lease agreement between the City Government of Tabuk and XRC Mall Developer.”

He also cited concerns about the existence of a compliance certificate and compliance of XRC to existing regulations and conditions in the agreement.

It can be recalled that on February 10, 2020, SP-Tabuk with Atty. Zorayda Mia Wacnang presiding approved Resolution No. 18 series of 2020 authorizing the city government of Tabuk to enter into a Contract of Lease with the XRC Mall Developer, subject to 8 conditions as follows:

1. Priority will be given to the current and legitimate stall holder after proper inventory;

2. P2M rent with an escalation of 5% every 5 years commencing on the 6th year of the contract;

3. The term of the agreement must be 30 years after which the structures will be owned by the City Government of Tabuk;

4. Conducive space for ambulant vendors will be provided;

5. Real property tax on the building will be paid by the XRC to the Local Government Unit during the lease period;

6. Rental fees to be collected from the dry and the wet sections will be based on the Market Code;

7. Temporary stalls must be provided for the vendors during the construction period; and

8. The final contract will be subject to the ratification of the Sangguniang Panlungsod.

On February 27, 2020, the Office of the Mayor furnished the final copy of the Contract of Lease for ratification.

With a certification from the City Legal Office attached to the contract of lease stating that the same ‘met the minimum requisites for a valid contract provided under the law,’ the august body issued Resolution No. 35 series of 2020 ratifying the said contract.

Contract of Lease did not comply with the Provisions of Government Procurement Law

The legal counsel during the session specified points proving that the contract of lease did not comply with the provisions of Government Procurement Law.

“Idiay surat mi, adda ti inbinsa-binsa mi idiay ngem awan ti bagas na. Tatta kuma palubusan dakami nga ikkan mi ti bagas diay na-obserba mi a nailanad idiay surat mi,” Comafay states.

First, he cited that the contract signed by the august body states that “whereas, the city council passed a resolution No.____ authorizing the city mayor to conduct a public bidding for the lease of the Leased Premises and enter into a Contract of Lease of the winning bidder.”

He affirmed that the body did not issue any resolution authorizing the conduct of public bidding as issued by the body.

Second, he cited the provision “whereas, on ___ the city published in a newspaper of general circulation an invitation to bid for the Lease of the Leased Premises.” According to Comafay, no publication was ever released.

Third, he said that there were no submitted bid proposals to the Bids and Awards Committee (BAC) contrary to what has indicated in the contract that “the proponents submitted their bid proposal to the city through the Bids and Awards Committee.”

Fourth, since no bids were awarded, bidding was never opened by the BAC contrary to the provision “whereas on ____, the city opened the bid proposal and after careful evaluation of the submitted bids, the city found the lessee to be the winning bidder based on its technical and financial proposal.”

Fifth, since the bidding was not conducted, then the Notice of Award and Notice of Proceed in favor of the lessee was never released.

Note for the readers that ‘blanks’ were copied as-is from ‘whereas clause of the contract of lease.’

Unfollowed Contract of Lease

Comafay likewise manifested that there were provisions on the contract of lease that were violated.

“Number 1, dituy item 6 ti contract, kunana a dapat nagited ti 9 months rental fee ken 3 months security deposit, awan paylang ti nait-ited nga advance rental, awan pay nait-ited a security deposit,” the counsel stated.

He said that XRC also did not provide a relocation site for the public market vendors as opposed to item 9.8, requiring XRC to allot a relocation site.

Item 9.11 of the contract requires a copy of the contract to be furnished to the Commission on Audit, but the commission did not receive any.

Item 10.3 was also violated as there was no Notice to Proceed yet, including the issuance of a building permit before the start of the construction.

“Kayat ko met lang nga ipaka-ammu kadakayo karkaru ta adda talipapa yu nga asideg idiay, daytoy metlang kontrata, iparit na ti talipapa. Idiay item 9.7, the contract prohibits the operation of talipapa within 200 meters radius of the market. Adu ti talipapa a maipaserra gapu ti contract of lease a daytoy,” Comafay said.

He further stressed that item 5 of the Resolution No. 18 stating that XRC “shall pay the real property tax of their building during the leased period” but the contract of lease contradicts item 13 that reads “real estate taxes for the land and the building shall be for the account of the city.”

According to Comafay, the contract is actually disadvantageous to the city government explaining that real estate taxes shall be divided upon by the province, municipal or city, and barangay.

“If it is for the account of the city, ti city garud ti mangbayad iti real property tax? Kayat na sawen, ti city ti mangbayad ti share ti province, dagiti share ti barangay. Kinompute tayo kadi nu manu diay? Nu mayat ti computation mi, kurang pay diay bayadan da nga abang tinawen para idiay share ti province ken diay share ti barangay,” Comafay revealed.

“Imbes kuma nga agnumar dituy siyudad, nalugi pay gapu dituy a kontrata,” he added.

Comafay asks the appearance of the Executive Body and concerned agencies

To resolve the issue, Comafay requested that the august body should ask the ‘executive officials’ to appear, explain and answer the queries he raised.

“Nu talaga kayat dakami a tulungan, pangaasi yu, ipaayab yu isuda dituy session ta sungbatan da dagiti damag mi. Adda ti oversight function yu, apo konsehal, usaren tayo ta public property dayta. Diay equipment ti city, CDRRMC a nausar a mangibaba ti landuk, public property diay karaman diay ti function yu nga mangkita kuma ta mausar nga ustu daytoy properties ti siyudad,” Comafay appeals.

The august body then agreed to request the concerned offices to explain their side next session.

Offices to be invited include City Mayor’s Office, City Legal Office, CDRRM, City Engineering and Planning Office, Barangay Bulanao officials, and representatives from XRC.

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