Ayala vs SM: Battle for Manila Bay project
MANILA, Philippines – The battle between two of the country's biggest business groups rages on.
The real estate unit of the country's oldest conglomerate is going head-to-head against a subsidiary of the country's richest family. At stake is a reclamation project that will provide additional 300-hectare land bank at the picturesque Manila Bay.
In a statement on Wednesday, October 23, property giant Ayala Land Inc. said it has asked the Pasay City government to extend the period of submission for a counter-proposal to SM Land Inc's unsolicited bid for the Manila Bay reclamation project.
Ayala Land informed Pasay Mayor Antonino Calixto in a letter that it only found out about the unsolicited proposal last week from a Malaya article carrying the notice to submit a competing bid. It requested an extension of the November 4 deadline so that it can "study the issues and prepare a competitive counter-proposal."
Ayala Land asked for 60 days to submit a competitive or comparable bid, citing RA No. 6957 (as amended by RA No. 7718) as basis.
Earlier, the Sy-led group presented the P54.5-billion project to the Pasay's Public-Private Partnership Selection Committee (PPP-SC).
Involved is a reclamation project that seeks to develop approximately 300-hectare "foreshore and onshore" Manila Bay areas within the city's jurisdiction. SM has proposed to shoulder financing in full under a joint venture (JV) with the local government.
According to the PPP-SC, only counter-proposals from interested parties who fulfill the following requirements can be considered:
- Interested bidders must have completed at least a 120-hectare reclamation project of their own, preferably within the Manila Bay area
- They must have at least P50 billion in net worth
- They must show proof from the tax bureau or banks of their ability to raise funds for the completion of the project
Ayala Land sought clarification through its letter for the purpose of requiring counter-bidders to have their own completed 120-hectare reclamation project.
It also requested reduction of the P5-million "non-refundable bid document fee or waiver of the fee in the interest of the right to information on matters of public concern."
"We believe the fee is significantly higher than what was required in other PPP projects. The government can only benefit from having as many interested parties as possible and setting a prohibitive fee can discourage capable bidders from participating," it said.
In the area already reclaimed along Manila Bay, SM group has an over 400,000-square-meter development that features SM Mall of Asia (one of the world's biggest shopping malls), various office buildings, a convention center and the massive SM Arena, which hosts sports events and concerts.
SM Mall of Asia is near the Entertainment City, a casino-entertainment complex envisioned to be a destination for gaming enthusiasts, tourists and luxury shoppers. The SM group and its partners from Macau and Australia are one of the 4 groups awarded the right to develop businesses at the Entertainment City. The Ayala group has opted not to participate in the Entertainment City projects.
Both property firms are among the biggest industry players and among the most aggressive in expanding their portfolio of residential, commercial and office properties.
With deep pockets and ongong multi-billion-peso developments all over the country, both are in a race to acquire sprawling lands where they could develop future projects.
They were also rivals in a race to gain control of Ortigas and Company Limited Partnership (OCLP Holdings), which owns vast prime lands in Metro Manila.
Both also figured in a dispute over the legality of building SM Aura in a Taguig City property which has unfolded into a battle between and among mall owners and the government.
They are also engaged or are eyeing capital-intensive infrastructure projects, including the Cebu airport expansion project. These are meant to complement their existing projects or to expand their existing businesses.
All these are part of strategies to sustain growth and to remain leaders in their fields. - Rappler.com
(Editor's note: An earlier version said the SM group has only 400 sqm of development in the reclaimed Manila Bay areas. We've corrected and are sorry for this error.)