Olongapo City -The Sandiganbayan has dismissed charges of graft and violation of the Build-Operate-Transfer (BOT) law against officials of Olongapo City regarding a lease agreement with SM Prime Holdings Inc. covering the City Civic Center or KBG Complex.
The anti-graft court has decided there was insufficient evidence presented against the city officials by prosecutors of the Ombudsman’s office.
They did not violate the anti-graft and BOT laws when they agreed to lease the KBG Complex to SM Prime because the lease pact is for commercial use and is not covered by the BOT law, the Sandiganbayan Seventh Division said in a 19-page decision released on Tuesday.
Then Olongapo City officials were former Mayor Rolen Calixto Paulino, incumbent Vice Mayor Aquilino Yorac Cortez Jr., former City Councilors Elena Calma Dabu, Noel Yabut Atienza, Alreuela Mauro Bundang-Ortiz, Edna Alviz Elane, Emerito Linus Dolantre Bacay, Randy Dela Cruz Sionzon, and Egmidio Manzano Gonzales Jr., incumbent City Councilors Eduardo Guerrero and Benjamin Gregorio Cajudo II.
The court decision also covered eight members of the Sangguniang Bayan. To be under the BOT law, the court noted the lease agreement should involve infrastructure projects as in construction, improvement and rehabilitation of roads, and bridges, railways, airports, and seaports.
Also covered by the BOT law are communication facilities, irrigation, flood control and drainage, water supply and sewerage systems, shore protection, power facilities, national buildings, school buildings, hospital buildings, and other related construction projects that form part of the government’s capital investment.
“Part of the undertakings of SM included the construction of a shopping mall, a hotel, buildings intended to be rented as office space for BPO firms, a parking structure, and a transport terminal.
The use and/or development of the leased premises (KBG Complex), therefore, cannot be considered as an infrastructure project,” the anti-graft court said.
“Since commercial use is not found in the enumeration of eligible types of infrastructure projects mentioned under the Revised Implementing Rules and Regulations of BOT law, the lease agreement should not be swept under the coverage of the BOT law.
Consequently, the accused could not be faulted for their alleged failure to comply with the provisions of the BOT Law and its implementing rules,” the court added. What applies to the agreement on commercial lease is Executive Order 301, according to the court.
The order establishes a Green Procurement Program in all government agencies and requires heads of agency intending to rent privately-owned buildings or spaces for their use, or to lease out government-owned buildings or spaces for private use, to determine the reasonableness of the terms of the lease and the rental rates.
EO 31 allows government entities to enter into such lease contracts without need of prior approval by higher authorities, subject to compliance with the uniform standards or guidelines established by law and state auditors, the Sandiganbayan said.
“In fine, because the lease agreement dated December 16, 2014 falls outside of the coverage of the BOT Law and its implementing rules, the present amended information fails to hurdle the test of sufficiency, which mandates that the facts alleged, if hypothetically admitted, would establish the essential elements of the offense charged as defined by law,” the court said.
“Since the facts charged in the information do not constitute an offense, the quashal of the amended information is thus warranted,” the court added.
The cash bonds posted by the 19 co-accused were also ordered released, subject to usual accounting procedures.The hold departure order issued against them on April 11, 2019 has been lifted by the anti-graft court.(Dante M. Salvana)