In a chance interview with reporters last week, BCDA President and Chief Executive Officer Arnel Casanova said the state-run corporation tasked with privatizing former military camps had already received SM Land Inc.’s revised unsolicited offer to develop the property.

Casanova declined to comment on the revisions made by SM Land on its unsolicited proposal. However, he said these involved the “terms of payment” which would still need the approval of the Office of the President.

He, likewise, declined to comment on whether BCDA would recommend a new round of bidding, or a “Swiss” challenge, which would give SM Land the right to match rival bids.

“We cannot yet disclose the details. But we will send the recommendation [this week],” Casanova said. “We don’t want to pre-empt President [Aquino].”

SM Land had earlier obtained a so-called certificate of successful negotiations. This was awarded under the previous BCDA board and the state agency’s current officials said they would have to study the deal and this transaction would also need the approval of Mr. Aquino.

SM Land offered in 2010 an upfront cash payment of P2 billion upon signing of the joint-venture contract on top of secured annual revenues of P25.9 billion for 20 years.

It also committed to invest a minimum of P20 billion, and will advance funding for the replication of military facilities affected by the development of the property.

At that time, other real-estate groups had expressed their interest to participate in the competitive challenge to be BCDA’s joint-venture partner in developing the property.

These groups included: Ayala Land Inc., Filinvest Land Inc., Jones Lang La Salle-Leechiu, Megaworld Corp., Robinsons Land Corp. and Rockwell Land Corp.

SM Land is a subsidiary of billionaire Henry Sy’s SM Investments Corp., a publicly traded conglomerate whose businesses span shopping centers, retail merchandising, banks and residential development.

The 33.1-hectare property is composed of lands presently occupied in part by the Army Support Command and Special Services Unit of the Philippine Army and in part by the Bonifacio Naval Station and Philippine Marine Corps of the Philippine Navy.

Meanwhile, the BCDA official said that it would take the “necessary legal steps to enforce the rules and protect the public interest” in Camp John Hay and collect the unpaid rental fees of its lessee Camp John Hay Development Corp. (CJHDevco).

Casanova, in a separate statement, said they have sent a formal letter to the CJHDevco, saying the latter “has no right to ask to rescind the contract and to recover damages from the BCDA.”

Casanova said the BCDA has always complied in good faith with its obligations.

“In contrast, it is CJHDevco which has committed material breaches of its undertakings and obligations,” Casanova pointed out, adding, “CJHDevco has fundamentally frustrated and thus destroyed the purposes of the agreement between the parties.”

The Fil-Estate owned CJHDevco  defaulted on its lease payments for the John Hay Special Economic Zone (JHSEZ) and its arrears have reached P3.024 billion by the end of 2011, the statement also said.

CJHDevco recently sent a notice to cancel the 2008 Restr uctured Memorandum of Agreement (RMOA), and filed for arbitration to forestall government’s efforts in collecting the lessee’s ballooning debt.

“As we have consistently maintained in our letters in the past, there is no lawful basis for CJHDevco to suspend and continue to suspend payment of its rental obligations to BCDA,” Casanova stated in his letter.

The nonpayment of rental fees is depriving the government-owned BCDA of much-needed funds for its operations and contribution to regional development. The same goes for Baguio City which has a 25-percent share of the proceeds from CJHDevco’s lease in Camp John Hay.

CJHDevco claimed that the absence of a fully functioning One-Stop Action Center (Osac) was its reason for rescinding the contract.

However, the John Hay Management Corp. (JHMC), BCDA’s subsidiary in JHSEZ, has said the Osac has been granting around of 80 permits each year to CJHDevco and its locators.

It was reported earlier that CJHDevco secured 22 permits from the OSAC in 2009, 28 permits in 2010 and eight in the first quarter of 2011 and that records also show that CJHDevco has twice attended the Osac orientations, contradicting their claim that the Osac was not in existence.

Dr. Jamie Agbayani, JHMC president and CEO, said that only the Department of Environment and Natural Resources can issue tree-cutting and earth-balling permits, referring to the December 21 letter of CJHDevco calling on the BCDA to approve permits for the cutting and earth-balling of trees as well as occupancy permits and excavation permits.

“The occupancy permits of the Camp John Hay Suites, on the other hand, were not issued because CJHDevco committed violations against the New National Building Code [RA 6541] and the New Fire Code [PD 9514], which precisely the lessee needs to rectify,” Agbayani pointed out.

The original lease contract, which was signed in 1996, obligates CJHDevco to pay the BCDA annual rentals, but has defaulted since.

BCDA agreed to three debt restructurings to enable the lessee to meet its overdue financial obligations to the government.