ILOILO City – The City Council has directed the City Legal Office to review the Joint Venture Agreement (JVA) with a private firm, which governs the management of the Iloilo Ferry Terminal.
The move followed the council’s approval of a transportation committee report led by Councilor Sedfrey Cabaluna, expressing concerns over the city’s revenue share under the agreement.
Between 2018 and 2024, the city earned a total of P4.418 million from the terminal, averaging P631,000 annually. In 2021 and 2022, the city’s shares were P389,561 and P535,591, respectively.
The current revenue-sharing model, which allocates only 1-5% of gross terminal revenues and 1% from other sources like berthing fees, cargo fees, and mall rentals, has been criticized as inadequate.
Despite the terminal’s significant operations, the highest annual payment recorded was P535,591 in 2022, raising questions about whether the agreement reflects the terminal’s true income potential.
Long-term deal issues
The JVA, initiated during the term of former Mayor Jed Patrick Mabilog, has a 25-year term with an optional renewal for another 25 years at the discretion of the private firm partner.
This long-term arrangement appeared to disadvantage the city if revenue shares are not improved, according the City Council.
Additionally, the agreement requires the private firm to submit annual operations and maintenance reports to the city mayor.
However, these reports have reportedly lacked transparency and public accessibility, further complicating the issue.
The City Council has authorized the City Legal Office to assess the agreement’s compliance and determine whether it is unfavorable to the city.
If necessary, the council supports renegotiating or rescinding the JVA to ensure a fairer arrangement.
The City Legal Office’s final review report, submitted on May 16, 2023, highlighted concerns about the city’s profit share and recommended renegotiation, considering factors such as inflation, the consumer price index, and the city’s best interests.
The council has mandated the City Legal Office to initiate renegotiation proceedings within 60 calendar days and submit the results to the Sangguniang Panlungsod for further action.
The review will also examine the role of the unincorporated Iloilo-Guimaras Ferry Terminal Corp. (IGFTC), as agreements involving unincorporated entities may lack enforceability unless ratified after incorporation.
It aims to secure a more equitable revenue-sharing model and protect the financial interests of Iloilo City./PN
