Controversial property developer Reghis Romero II (who owns R-II Builders Inc.) apparently hasn’t stopped trying to make the government pay him an additional P1.8 billion in connection with the Smokey Mountain project.

(It will be remembered that the government—through the Home Guaranty Corp. or HGC—had to take over the project after it became clear that R-II Builders, with a paid-up of only P500,000 did not have the financial muscle it claimed it had to complete the P6-billion reclamation and development project.)

Despite the government takeover of the project, R-II Builders has since been doggedly insisting that the government still owed it P1.8 billion representing what it said was “residual value” as the original contractor of the project. This then became the basis of two back-to-back civil suits it has filed against the government.

He has made this claim despite the fully documented fact that the government, through the HGC, had paid him a total of P659.27 million as of June 2002, including more than P148 million in cash advances plus valuable pieces of government property for a total of P659.27 million as of June 2002.

The payments in kind included P255 million worth of property inside the Manila Harbour Centre and P258.3 million in common shares of Harbour Center Port Terminal Inc.

As far as I know, R-II Builders has not backed out from its pending collection suit before the Quezon City Regional Trial Court.

The second, closely related, civil case was filed with the Manila RTC. R-II Builders has formally asked the court to take over an asset pool worth P4.2 billion that the HGC at present controls. In essence, it wants the court to rescind the deed of assignment that is the basis of HGC’s control over the asset pool.

R-II Builders, believe it or not, wants to be the court-appointed receiver of the asset pool instead of the HGC.

Romero’s petition to revoke HGC’s deed of assignment, however, was blocked as early as last year by the High Court when it issued a restraining order to Branch 22 of the Manila RTC.

In issuing the TRO, the High Court said:

“Now, therefore you, the Presiding Judge of RTC, Branch 22, Manila and R-II Builders Inc. and the National Housing Authority from proceeding with the enforcement of the orders of the RTC dated March 3, 2009, and Sept. 29, 2009, insofar as they relate to Civil Case No. 05-113407 entitled, ‘R-II Builders Inc. vs Home Guaranty Corporation and NHA,’ including the granting of any order that would allow the subject receivership to take effect; the processing of any action for lis pendens, adverse claim or similar annotation; or the lifting of any such annotation if any has been processed or annotated on the titles of the lots involved in this case as well as from otherwise proceeding with Civil Case No. 05-113407 during the pendency of this petition.”

That was last year when the government got alarmed that the Manila RTC had denied the HGC’s motion to dismiss R-II Builders’ outrageous petition.

The Manila RTC did not only deny HGC’s motion, it also granted R-II’s motion to admit an amended complaint to replace its amended and supplemental complaint for rescission. In other words, the court appeared to be favoring R-II Builders all the way, while consistently denying all of HGC’s defensive legal moves.

This, of course, made the HGC turn to the Supreme Court, which had promptly stopped the Manila RTC executive judge from proceeding further with the case through a temporary restraining order.

And finally, after about a year—barely two weeks ago (June 22, 2011), the Special First Division of the Supreme Court promulgated a final decision that essentially upheld the HGC’s legal arguments and declared R-II Builders Inc.’s claims “bereft of merit.”

The HGC had argued that the Manila RTC did not have the authority or jurisdiction over the case, being special commercial courts. Besides, it argued, a huge sum of government funds were involved in the case, and R-II Builders did not pay the corresponding docket fees. The Supreme Court upheld the HGC on both counts.

Reghis Romero and the HGC are not fighting over peanuts here. It was in 1993 when Romero’s company (under President Fidel V. Ramos) entered into a joint-venture agreement covering the leveling, reclamation and development works for the P6-billion Smokey Mountain Project, which had become an international symbol of degradation and abject poverty in the Philippines.

When the Ramos administration bowed out, the government realized that R-II Builders did not have the financial capability to continue undertaking the project for the government. Romero’s company had originally committed to fund the project from start to finish only to end up “relying heavily on the government financial institutions to come across with the project’s huge funding requirements.”

The government in time saw it fit to pay off Romero a total of P659.27 billion to totally settle whatever spadework he had done on the project.

It was at this juncture that the HGC came into the picture with its asset pool. That pool consisted of (HGC-guaranteed) loans or investments from the Social Security System, NHA and the Government Service Insurance System.

Thus, it became HGC’s responsibility to see the project through to its completion. That’s how taking over the asset pool became R-II Builders’ legal objective.

The final decision of the Supreme Court on this issue is definitely a major setback for R-II Builders. I suppose it will now be infinitely more difficult, if not altogether impossible, for R-II Builders to extract any additional amounts from the national government as far as the Smokey Mountain project is concerned.

How R-II Builders bested all other developers vying for the project in 1993 was in itself a feat that had amazed the most established property developers and contractors in the country. But in this country, the fortunes of some businessmen have risen or fallen with the changes in the political climate.

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