50-year tax exemption for proponents of Lapu-Lapu Expressway questioned

MEMBERS of the Lapu-Lapu City Council are questioning some details of the proposed P24.8 billion Lapu-Lapu Expressway (LLEX) project, including a plan to exempt firms involved in the joint venture agreement (JVA) from paying business and real property taxes to the City government for 50 years.

During its regular session on Thursday, Dec. 9, 2021, members of the City Council’s opposition majority raised some issues on the proposed deal to be entered into by the City, including that the City will receive only one percent share from the proceeds of the project; the lack of access road that could connect the project to other barangays and that barangays affected by the project were not consulted.

The council moved to return the letter of Mayor Junard “Ahong” Chan requesting an ordinance to allow him to sign the JVA between Lapu-Lapu City and LLEX Corp. composed of Premium Megastructures Inc., Ulticon Builders Inc. and MTD Philippines Inc.

In an interview with SunStar Cebu, City Councilor and lawyer Michael Dignos acknowledged the importance of the project but said they observed that the JVA had many unclear provisions that could be a liability to the city.

“We know nga importante siya (this is important) but the way it is being prepared and presented, kuwang jud kaayo siya sa (it really lacks) study,” said Dignos.

The councilor also questioned the provision in the JVA that would exempt the LLEX from paying business and real property taxes for the span of 50 years since there are no existing ordinances that allow such exemption.

Dignos added that there are incentives given to investors, but these would not reach a 50-year time frame. For instance, the Philippine Board of Investments gives only six years for tax holiday.

P1 billion obligation

Another reason raised by the councilors is the city’s obligation to pay an amount not more than P1 billion if the local government cannot perform its obligations stated in the JVA.

According to Dignos, the City’s obligations include the responsibility to secure the Certificate to Operate from the Toll Regulatory Board, create a Memorandum of Agreement with the Mactan-Cebu International Airport Authority and the Department of Public Works and Highways, and process the acquisition of road right of way.

In a separate interview, Mayor Chan said all the concerns raised by the councilors would have been answered if only they attended the committee hearing.

“They boycotted it because that was the order given to their group,” Chan said in Cebuano.

Chan said Dignos has no authority to question the project because he was not present during the public hearing that took place last Monday, Dec. 6.

“Binastos na sad na kaayo nga wala ta motunga unya mo raise ta og mga pangutana,” said Chan. (It’s very rude that we don’t show up and then we raise questions.)

Dignos said he did not attend the hearing because there were documents from the proponents that were lacking.

“I was not there because I told them that I can’t attend until I get the whole documents,” said Dignos.

The mayor said the move is a “decent way” of denying the project since the opposition councilors felt the pressure from the public.

“It was an indirect way of pagbabag (blocking it). If they will say nga (that) the project is denied, yabo sila (their true motives will be revealed),” Chan said.

Chan further said politics is the main reason the project is being delayed since the opposition does not want the LLEX to be built during his administration.