GATCHALIAN-OWNED Waterfront Philippines, Inc. has won a P1.5-billion contract to develop and operate the 235-hectare Mimosa Leisure Estate.
In a disclosure to the stock exchange, the listed hotel and leisure company said Clark Development Corp. (CDC) had awarded the contract to it on July 4.
In a statement, CDC said its board had approved the P1.5-billion contract after evaluating the bids and qualifications of the proponents.
The state corporation said it would earn at least P160 million yearly from the lease of the property over a 50-year term.
Outgoing CDC President Liberato P. Laus said Watefront Philippines would invest P1 billion in the estate within five years. CDC and Waterfront Philippines will enter into a 90-day memorandum of understanding that will mature into a lease agreement upon the delivery initial commitments. Waterfront Philippines will pay CDC an initial amount of P770 million within 90 days from the signing of the deal.
The amount includes P450 million in minimum payment, P160 million as security deposit and P160 million as advance lease rental. The contract is renewable for another 25 years, Mr. Laus said.
Waterfront officials declined to disclose details about what the company intends to do with Mimosa, saying it would issue a statement later this week.
Owned by plastic king William Tiu Gatchalian, the country’s largest first-class hotel operator was among the 10 bidders that submitted their letters of intent. Only eight firms attended the pre-bid conference on May 6.
The list was further trimmed down between Korean consortium Hanwool I & D Corp. and Waterfront Philippines, the only companies who submitted their respective bids during the bid submission and opening on June 6.
Waterfront Philippines later became the lone bidder for Mimosa after Hanwool was disqualified on technical grounds. But CDC said it was not ready to give Mimosa to a company owned by a “plastic king.”
Mr. Laus said the opening of the bids was witnessed by members of the CDC board, representatives from the Office of the Government Corporate Counsel, Commission on Audit, Clark Investors and Locators Association, Metro Angels Chamber of Commerce and Industry, and Pampanga Chamber of Commerce and Industry.
The Mimosa estate includes a 303- room, seven- storey Holiday Inn Hotel standing on a 2.92 hectare property and a 171 hectare golf and country club.
It also includes the Mimosa Regency Casino on a 1.62 hectare property. The Casino used to be owned by Mondragon Leisure and Resorts Corp.
The government took over the property in 1999 after Mondragon failed to comply with a compromise deal it had signed with CDC. In 2006, the government announced a plan to lease out the leisure estate.
Under the terms of reference for the bidding, investors must operate and improve the existing facilities of the resort estate and develop it into a prime recreational destination in Central Luzon.
Earlier this year, Watefront Philippines said it was allotting some P5 billion for the acquisition of up to four hotels within the next two years. Profits of the country’s larges first – class hotel operator in 2007 surged by almost 800% to P163 million following the expansion of its international and domestic distribution network.