In 1992, a flurry of humiliating articles about Smokey Mountain suddenly appeared out of nowhere in some newspapers. It was a year of transition, from the Cory Aquino administration to Ramos. Aside from a series of coups, a succession of blackouts, a raging insurgency both in the North and South, there was this symbol of Philippine poverty that was used as the very sign that EDSA revolt faltered in its mission.
What the incoming administration did was simple---bring Smokey Mountain down. Transform its image, from a dump to a mountain of promise. Government wants low-cost housing there for some 2,600 poor families.
Government estimated that it will take 6 billion pesos to reclaim the land, a hefty sum, which it is not ready to finance. Hence, it decided to bid out the project.
R-2 builders, a contractor very close to the Powers-That-Be at that time, won the bidding. R-2's mission is to reclaim 79 hectares of land previously devoted to refuse and turn it into a low cost housing site. The contractor close to Fidel Valdes Ramos entered into a JOINT VENTURE AGREEMENT (JVA) with the government, composed of the National Housing Authority (NHA), the Home Guaranty Corporation and the finance department.
From 1992 to 1996, R2 Builders reportedly did its part and bankrolled at least 4.1 billion pesos into the Smokey Mountain Asset Pool (SMAP), where other resources to finance the project goes into. Court records show R-2 failed to release that amount of 4.1 billion pesos, its contractual obligations under the MOA and JVA it entered into with government.
R2 Builders claimed that it constrcuted 33 temporary and 21 permanent buildings apart from reclaiming 79 hectares from Manila Bay. The 21 PERMANENT STRUCTURES have been turned over to the beneficiaries since 2002 and R-2 Builders claim that until now, government has not paid them yet.
R-2 Builders, according to court records, only forked 211 million pesos for the project. It now claims that government owns it 1.8 billion pesos. It then filed a claims suit before the Quezon City Trial Court.
And because R-2 Builders did not complete the project, a so-called Smokey Mountain Development Fund (SMDF) was created to address the billions of pesos worth of shortfalls the project encountered due to the inability of the contractor, which, in this case, R-2 builders, to fully finance the completion of the project.
SSS purchased so-called Smokey Mountain Development Fund (SMDF) certificates worth 1.2 Billion while the Home Guaranty Corporation, based on its mandate, exposed itself to the tune of 3 billion pesos.
Okey, here's the catch.
According to a certain Naval, who claims to be a journalist, Vice President Noli de Castro, who heads the government's low cost housing project reportedly signed a May 25 Memorandum of Agreement/Compromise which directs a payment of 4 billion pesos to the Home Guaranty Corporation (HGC), one of those who forked billions of pesos worth of the People's Money for the completion of the project.
The compromise agreement, Naval claims, is a conspiracy cooked up by de Castro, National Housing Authority President Federico Laxa, Home Guaranty Corporation president Gonzalo Bongolan and Finance secretary Margarito Teves in "collusion" with R-2 Builders owner Reghis Romero.
What this Naval fears is that the 4.4 billion pesos will go straight to R-2 Builders. The other camp, however claims that the 4.4 billion pesos will actually pay out HGC who bought 3 billion pesos. The residual amount, R-2 Builders claim, will go to them, if there is any left.
So, Naval is right---1.4 billion pesos will go to R-2 Builders, an amount far exceeding that of what they really financed! Remember that they only financed 211 million, now they will be paid 1.2 billion pesos more.
If this Memorandum is true, then, this is really a stinking deal indeed!
Kita mo itong administrasyong ito, aalis na lang, nag-iwan pa ng malaking utot.