Letter/Appeal to the BOR Re: FMAB

Letter received by the Office of the Secretary of the University as dated, regarding the appeal of the union to review the BOR's approval to the Lease Contract between the University and the Daniel Mercado Medical Center on the proposed PGH Faculty Medical Arts Building (FMAB)in the light of the conditions and procedures prescribed by RA 9500 (UP Charter of 2008) on "disposition of the University's assets."

November 6, 2009

CHAIRMAN EMMANUEL Y. ANGELES; AND,
THE HONORABLE MEMBERS OF THE BOARD OF REGENTS
University of the Philippines

Dear Messrs/Mesdames:

Greetings from the All UP Workers Union – the recognized union for the Administrative Sector of the University!

This is an urgent request to the Honorable Members of the Board of Regents (BOR) to immediately remedy a serious oversight relative to the recent confirmation by the BOR of the Contract of Lease of the UP-PGH Faculty Medical Arts Building (FMAB) with the Daniel Mercado Medical Center in view of certain requirements set forth by Republic Act 9500 or “The University of the Philippines Charter of 2008” as follows:

“SEC 23. Safeguards on Asset Disposition. – The preservation of the value of the assets of the national university shall be of primordial consideration.

XXX

Notwithstanding the provision of this Act or any law to the contrary, the lease of more than five (5) years of the assets of the national university and any transactions referred to in Section 22 shall be subject to the following conditions and procedures:

a) xxx

b) The transactions shall be based on a multi-year comprehensive development plan, crafted and developed by qualified urban planning professionals having at least five (5) years experience, with prior consultations with and concurrence of third-party experts and duly approved by a majority vote of all the members of the Board;

c) xxx

d) In the case of two (2) failed biddings and negotiated transactions, if undertaken, the Board, when considering the approval of any such transaction, shall secure a fairness opinion report from an independent third-party body. This body shall have five (5) members, three (3) of which shall be nominated by the Bankers Association of the Philippines (BAP), Investment Houses Association of the Philippines (IHAP), Trust Officers Association of the Philippines, or the Financial Executive Institute of the Philippines (FINEX). Xxx

XXX

XXX

(e) If the contract or transaction involves an amount more than Fifty Million Pesos (P50,000,000.00), it shall be approved by three-fourths (3/4) of all the members of the Board: Provided, That the splitting of contracts, which is by breaking up a contract into smaller quantities or amounts or dividing contract implementation into artificial or arbitrary phases or subcontracts for the purpose of circumventing this provision, shall not be allowed. (Emphasis ours)

We believed that the Honorable Members of the BOR was ill-advised when rushed for the confirmation of the aforementioned Contract of Lease without considering these particular provisions of the new UP charter that took effect on June 2008.

To recall, the present contract was brought to the attention of the BOR only during its 1240th meeting on January 28, 2009 or six months after the effectivity of the new UP Charter. After signing the same on June 18, 2009, was brought for confirmation on its June 2009 meeting. While, the confirmation was only given on its August 2009 regular meeting, nothing in the minutes of the BOR meeting, showed that there exist discussions on the ramifications of the new UP Charter to the said contract, neither also when it was discussed again on its October 2009 meeting.

In view therefore of what we perceived as a patent violation of aforementioned provisions of the new UP charter, particularly items (b), (d) and (e) of Section 23 thereof, we are requesting for an immediate discussion of said matter in the November 2009 meeting of the BOR in order to satisfy the following:

1. A multi-year development plan by a qualified urban planning professional with at least five (5) years experience, and prior consultations with concurrence of third-party experts as required under item (b) of Section 23 of RA 9500;

2. A fairness opinion report by an independent third-party body. This body shall have five (5) members, three (3) of which shall be nominated by the Bankers Association of the Philippines (BAP), Investment Houses Association of the Philippines (IHAP), Trust Officers Association of the Philippines, or the Financial Executive Institute of the Philippines (FINEX as required under item (d) of Section 23 of RA 9500;

3. Approval/confirmation of the contract by ¾ of all the members of the Board of Regents as required under item (e) of Section 23 considering that the total amount of transaction for lease alone of P1,000,000 per month for the first five years of the 25-years lease period already amounted to P60,000,000 - far exceeded the P50,000,000 requirement set forth in said item (e). Further taking account of the estimated amount of the property of P40,000,000, the 10% increase or escalation of monthly rental starting on the 6th year as stated on the contract itself; and the estimated amount involved for the development of the said university property; the total transaction cost of the contract involved more than a billion pesos (P1,000,000,000) for the entire duration of the contract.

We are requesting finally for the immediate cancellation of the said contract until such time that the safeguards set forth by the UP Charter of 2008 (RA 9500) as stated in Section 23 thereof, have been meet and satisfied. We feared that the continued implementation of this contract in spite of its procedural infirmities would served as a precedent in future transactions of the University, forever tarnished the image of the University, especially the Board of Regents, and open a floodgate of legal actions all the way to the Supreme Court.

In the light of this new development, the Union is determined more than ever to institute measures to protect the interest of employees of the hospital/university that will be affected by the operation of a “private FMAB” within the PGH Compound, and; the interest of the Hospital, the University and the public - especially people’s health.

Very truly yours,

MR. BENJAMIN L. SANTOS, JR.
President, Manila Chapter

MR. JOSSEL I. EBESATE, RN
National Executive Vice President, and
Secretary, Manila Chapter

Copy furnished:

SENATOR LOREN B. LEGARDA
Chair, Senate Committee on Health

REP. SATUR O. OCAMPO
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