P14-M payoff

Lease contract on bus terminal lot requires Cebu City to pay full-term rental

Agreement between Cebu City and Mandaue City, signed in 1995, is valid for 25 years Contract provides that Cebu City has to pay Mandaue rental of P2 million every year

THE Cebu City Government cannot terminate its contract with Mandaue City for the operation of the Cebu North Bus Terminal (CNBT).

Cebu City Administrator Jose Marie Poblete said that if Cebu City insists on ending the contract before its expiration in 2020, it would have to pay the Mandaue City Government a total of P14 million.

The amount covers the annual rental of P2 million for the lot that is occupied by the CNBT.

The lot is the property of the Mandaue City Government. The local governments of Cebu and Mandaue entered into a 25year lease agreement on the property in 1995.

The Cebu City Government tasked the Cebu Provincial Bus Operators Multipurpose Cooperative Inc. to operate and manage the terminal. The income of the CNBT is divided among the two local government units and the cooperative.

The lease agreement on the lot states that if Cebu City “abandons” or “surrenders” the lease before the end of the term without the concurrence of Mandaue City, it must pay the rent for the remaining years in the contract.

‘Ridiculous’

This is why, Poblete said, the Cebu City Government cannot pre-terminate the contract.

“It would be ridiculous for the City to terminate the contract considering that we are aware of the contract provisions,” he said.

He said Cebu City Government prefers that the decision to pre-terminate the lease would come from the Mandaue City Government.

Talks about terminating the contract of lease surfaced after the Cebu Provincial Government offered to take over the CNBT.

Capitol said it wanted to improve the services at the facility, which is frequented by constituents of the Province.

Asked to comment about the matter, Provincial Attorney Marino Martinquilla said Capitol is aware of the provision in the lease contract, which is why it is just waiting for Mandaue City’s reaction.

Poblete stressed that the CNBT management board has not yet made a decision on the fate of the facility.

“We are still talking and discussing how to improve the terminal’s system. Our primary concern here really is the convenience of the riding public,” he said.