18 September 2008

UIG claim of P1-B investment disputed

Officials of the Subic Bay Metropolitan Authority (SBMA) have disputed claims by the Universal International Group (UIG) that it has invested P1 billion to develop the golf course facility in this free port.

Pointing out that UIG was booted out of the facility precisely for its failure to introduce developments in the former US military golf links, the SBMA questioned where the supposed P1 billion investment went.

"We believe that the claim cannot be substantiated because we have yet to see the clubhouse, or the condo, or the villas that the UIG had promised in 1995," SBMA Administrator Armand Arreza said.

"As you can see, despite the UIG having operated the facility for more than 10 years, nothing much has changed. The property is still fenced off with barbed wire until now," he added.

Arreza said that UIG president Jack Ho apparently bloated his firm's capital exposure when he made his case for the company during a House committee hearing recently.

Ho said the P1 billion represented "an accumulation of so many investments, of operating expenses," with around P900 million going to improvements alone.

He claimed further that because of UIG's development, the golf course was assessed by a private appraisal firm in 2001 to be worth P1.3 billion.

SBMA officials, however, have pointed out that the UIG has not delivered on its commitments under its lease development agreement (LDA) with the agency.

The first development phase includes the rehabilitation of the golf course to world-class standards by 2001, the construction of two tee houses by 2002, a full service halfway house by 2003, as well as the establishment of a fishing area, an orchid garden and a handicraft center.

The SBMA said there was only partial compliance on these requirements, while the orchid garden and handicraft center have not yet been constructed.

The second and third phases would have seen the construction of a 100-room condominium and 80 villas by 2006, while the fourth phase would have the completion of a 400-room resort/casino hotel by 2011.

These commitments, however, have not been realized, the SBMA said.

Along with UIG's unpaid debts to the SBMA amounting to $44,070 in dollar account and more than P25 million in peso account, the unfulfilled development commitments had forced the agency to take over operations in May last year.

The dearth of improvements at the Subic golf course, meanwhile, has led irate members of the UIG-controlled Subic Bay Golf and Country Club to sign last June 15 a manifesto expressing support to the SBMA and "elation" over its takeover of the facility.

According to records, the SBGCC has close to 500 members who paid fees equivalent to P200,000 per share.

The paid-up membership fees, dues, and other income collected from the golf course operation, may have been the sole source of funds that the UIG had used for what little development the firm has introduced into the facility, club members also suspected.

Other members rued that the club shares they paid for turned out to be only "playing rights" because UIG has not delivered on the full-blown country club amenities that it has promised earlier. (SBMA Corporate Communications)