GGRAsia – Duterte orders review of Landing’s land lease contract

Duterte orders review of Landing’s land lease contract

Aug 08, 2018 Newsdesk Latest News, Philippines, Top of the deck

Philippine President Rodrigo Duterte has ordered the country’s Department of Justice to review of the land lease contract between Nayong Pilipino Foundation (NPF) and casino resort investor Landing International Development Ltd, the presidential spokesperson announced on Tuesday afternoon.

The clarification was issued after it had been announced on Tuesday morning that President Duterte had fired the entire board of the Nayong Pilipino Foundation. The latter – a body controlled by the Philippine government – leased the land for the casino project to Landing Resorts Philippines Development Corp, a subsidiary of Hong Kong-listed Landing International. The scheme is to be developed in Entertainment City, in the Philippine capital Manila.

“The President has instructed a review of the contract of lease entered by NPF with Landing Resorts Philippines Development Corp, which [he] … described, in his own words, as ‘flawed’,” said presidential spokesperson Harry Roque in a statement.

“It was entered into without public bidding and was disadvantageous to the government,” added Mr Roque.

On Wednesday, President Duterte said there would be no new casinos established during his term.

“I hate gambling. I do not want it,” the official said during a public speech as quoted by the official Philippine News Agency. “There will be no casinos outside of what are existing. I am not granting anything,” he added, without elaborating.

Landing International has meanwhile said that its plan to develop the casino resort at Entertainment City would not be affected by the announced removal of the Nayong Pilipino Foundation board.

“From the group’s view point, the recent decision of the Philippine government to replace members of the NPF board of trustees did not affect the validity of the subject contract of lease,” said the Hong Kong-listed firm in a Tuesday press release.

The news about President Duterte’s decision to fire the board members of the Nayong Pilipino Foundation broke as Landing International was holding a ground breaking ceremony for the casino project. The Philippines casino resort – dubbed NayonLanding (pictured in an artist’s rendering) – has a price tag of US$1.5 billion.

There are three large-scale casino properties at Entertainment City, with a fourth one being developed by Travellers International Hotel Group Inc on land that is also owned by the Nayong Pilipino Foundation. The latter body signed in August 2014 a 25-year lease contract with Resorts World Bayshore City Inc – a unit of Travellers International – for a land plot of approximately 5.4 hectares (13.3 acres). That deal was also done without a public bidding, according to a June report from the country’s Commission on Audit.

The provisions in a draft version of the lease contract between the Nayong Pilipino Foundation and Landing International’s included a term of lease of 50 years, subject to approval from the country’s Tourism Infrastructure and Enterprise Zone Authority. The lease provisions were eventually amended in July, with an increase of 140 percent in the monthly rental fee to be paid by Landing International, and a decrease in the initial lease period from 50 years to 25 years.

Late Tuesday evening, Landing International said in a separate stock exchange filing that it had not received any official notice about the government suspending its project or reviewing its lease for its site.

The firm said additionally that under the agreement it would pay a monthly rent of nearly PHP34.5 million (US$650,050) to the Nayong Pilipino Foundation, with the latter body also receiving 10 percent of the net profit after tax from the operations of the theme parks within the project.

“To the best knowledge of the company, the lease is legal, valid and enforceable,” said Landing International in its latest filing, adding that the Nayong Pilipino Foundation had obtained a legal opinion from the Office of the Government Corporate Counsel before signing the lease.

On Tuesday, the head of the Nayong Pilipino Foundation, Patricia Ocampo, denied any wrongdoing in the land deal with Landing International.

“The lease contract with Landing International Development Ltd is above board, and is highly advantageous to the government and to the Filipino people,” she said in a statement.

The Philippine Amusement and Gaming Corp (Pagcor), the casino regulator in that country, confirmed on July 26 that it had granted a provisional gaming licence to Landing Philippines.