The Commission on Audit has ordered the Tourism Infrastructure and Enterprise Zone Authority to explain its decision to prematurely renew the contract of lease for the occupancy of a Rizal Park property by the Singaporean firm operating the Manila Ocean Park.

COA - CoA orders TIEZA to explain early renewal of Manila Ocean Park contract
Commission on Audit (COA)
(MANILA BULLETIN FILE PHOTO)

CoA also revealed in its 2019 annual audit report for the tourism agency that TIEZA has made efforts to eject from its property the Chamber of Commerce Baguio-Benguet Chapter for gross violation of  the contract of lease.

From sending notices of termination of the lease agreement to BBCCII, TIEZA has also sought the disconnection of electricity to its property, apparently to force the businessman’s group to vacate the leased premises.

“It is grossly disadvantageous to the government that the Contract of Lease (Platform) between TIEZA and China Oceanis Pte., Ltd. (COPL) that was executed on April 25, 2005 to expire on April 24, 2030 was prematurely renewed on Oct. 9, 2015 for another 25 years, extending the effectivity of the contract from 2030 to 2055,” CoA said in the annual audit report prepared by a team of State auditors headed by Director Elsielin C. Masangcay.

The audit team said the best industry practices “dictates that the renewal of long-term contracts of lease” be executed when the current agreement nears expiration.

Audit records indicated that a 25-year extension of the lease contract was granted by TIEZA 15 years prior to the 2030 expiration of the current contract.  The renewal came in just ten years that the contract was in effect.

Auditors decried the decision, pointing out that this is “grossly disadvantageous” to government.

Aside from failing to conduct a public bidding for a new contract, TIEZA also failed to consider the “future value of money” for the rental amount in the next 25 years.

During the exit conference, the TIEZA management informed CoA that the renewal of contract was not ratified by the board of directors.

Reacting to the adverse audit observation on the lease by the BBCCII of a TIEZA property, officials of the agency said it had taken strong measures to eject the business group.

CoA said the BBCCII has been violating the lease contract for the property when it subleased the building it was renting form TIEZA without its authority.

The BBCCII was informed on Feb. 22, 2016 that TIEZA was pre-terminating the contract of lease and ordered the business group to vacate the leased premises.

TIEZA agreed to put on hold the termination of the contract until Jan. 31, 2017.

“However, to date, despite the continued demand to vacate the premises, BBCCII is still occupying the leased building without paying for the rent on the property since February, 2017, thus, depriving the authority of opportunities to better use the property and the income that could be derived therefrom,” CoA said.

CoA recommended the filing of an ejectment case against the BBCCII if it will continue to ignore demands for the return of the property to TIEZA. 

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