A viable ppp project
Faced with billions of pesos in unpaid obligations to its creditors, not to mention hundreds of millions in unpaid benefits to its workers, Intercontinental Broadcasting Corp. (IBC), which runs TV station IBC13, would have gone bankrupt were it not for the fact that it was sequestered and government-managed.
The situation was going from bad to worse for IBC 13, which was losing P80 million a year from its operations. Not even the government came to its rescue. In the meantime, its obligations to its creditors and workers kept piling up by the day.
It was, therefore, like manna from heaven for IBC 13 when property developer Primestate Ventures Inc. offered last year a joint venture proposal to develop Broadcast City over the next six years.
As part of the proposal, Primestate agreed to inject P728 million over six years into the sequestered broadcast station.
Aside from infusing much needed fresh funds, Primestate set out to refurbish, at its own expense, the two studios inside the rundown IBC compound – those of IBC 13 and RPN 9 - to bring them at par with the major networks.
With this new lease on life, IBC 13 will now be able to settle most of its obligations despite detractors’ attempts to disparage and derail the project.
In exchange, IBC 13 agreed to invest 3.6 hectares of its 4.1-hectare property in the Broadcast City compound in a joint venture project with Primestate for the construction of a mixed residential and commercial complex to transform the deteriorating compound into a vibrant community.
It must be emphasized that Primestate’s proposal was above board and was approved by all the stakeholders.
It was also after thorough consideration the IBC Board and workers’ unions, under the watchful eye of a Joint Venture-Selection Committee with representatives from the Office of the President through the Public Information Agency (PIA), Commission on Audit (COA), Presidential Commission on Good Government (PCGG), National Economic Development Authority (NEDA), and the Office of the Government Corporate Counsel (OGCC), gave the proposal a go-ahead in March 2010.
The IBC 13-Primestate joint venture calls for IBC to parlay Broadcast City’s 3.6 hectares—a mix of decrepit structures and idle land—on which the developer will transform, into a residential hub of medium-rise condominium buildings.
From such investment, IBC will earn a guaranteed P728 million in six years.
Of the P728 million, P278 million will be paid by Primestate in outright cash for the settlement of employees’ benefits via an escrow facility with the Bank of the Philippine Islands (BPI). To date, a total of 309 workers have received P200,000 each from three releases made from the escrow account (releases have been scheduled every six months).
The remaining P450 million will be paid through the construction and delivery of six-storey corporate buildings, two live studios and a commercial building for IBC to be built on a 5,000-square meter property within the Broadcast City compound.
Under the joint venture, IBC-13 stands to receive guaranteed revenues of P728 million, or roughly P20,000 per square meter. The projection exceeds the P10,000 per sq.m. appraisal of both the Bureau of Internal Revenue and the Quezon City government, and the P10,000 and P8,000 per sq.m. appraisals by IBC-13 independent appraisers.
Fault-finders insist the joint venture violated privatization laws as it was not coursed through the Privatization Council. But the fact is, the JVA did not privatize IBC and, instead, merely used its assets as investment in a project guaranteed to generate superior profits.
IBC land also wasn’t sold to the property developer as IBC still owns the land.
Being merely an investment undertaking, the IBC Board had the authority to approve the JVA. Clearances and approval from the DOF and the Department of Budget and Management (DBM) are required if the agreement requires government guarantees or subsidies.
In making the process more transparent, the joint venture went through a Swiss challenge. Property developers were invited to match or provide a better option than the Primestate offer.
Primestate shouldered all the risks the joint venture entailed, the project fully secured by a performance bond, that is, even if no new development is carried out, IBC gets the P728 million guaranteed income.
The deal hauls IBC 13 from dire financial straits, settles long unpaid wages to its employees, and paves the way for future privatization. So when the time comes when government feels the broadcast company is ready for privatization, then it can definitely demand a higher price tag being a financially and operationally viable entity compared to how it was before Primestate came in.
The joint venture raises the IBC property value from P441 million to at least P728 million.
This is, indeed, a classic example of how public-private partnership should be carried out to get the best deal for the government.
IT firm introduces ‘Super WiFi’
Competition among US tech firms Google, Microsoft and Facebook were set aside temporarily, even for one night, as their top representatives flew in to Manila recently to throw their unequivocal support behind a new initiative that will connect even more millions of Filipinos to the Internet.
Pangasinan Rep. Rose Marie “Baby” Arenas led the launch of “Juan Konek,” a project of the Department of Science and Technology (DOST) that is being pilot tested at Pulilan Central School in Bulacan. It will empower the youth in the digital age and further DOST’s Smarter Philippines Program to make the country globally competitive.
The school and its teachers and students were the first to try the TV White Space (TVWS) network, or more commonly known as Super WiFi, as provided by FilAsia System Technologies Inc. (FAST), a WISP Wi-Fi operator, together with its partners Aviacomm Inc., a TVWS network technology innovator, and HuwoMobility.
The ICTO’s TV White Space Initiative comes from the need to provide connectivity for the millions of people beyond the reach of commercial wired or wireless broadband service. TVWS technology uses un-allocated television frequency spectrum to provide data connectivity.
Once this technology is approved for commercial use, Filipinos who cannot access the Internet via landline, mobile, satellite or fiber will be able to connect to the global Internet village through Super WiFi. Whereas mountains and seas used to be barriers for connection due to the country’s geographical characteristics, these will now be less so.
Each Super WiFi has a TV signal reach of two kilometers and can accommodate up to 100 Internet users – roughly one small barangay.