Prime contractor and developer Peregrine Development International (Peregrine) wants Global Gateway Development Corp. (GGDC) to respect the law and fund the continuing development of Global Gateway Logistics City (GGLC) project in the Clark Freeport Zone.
Peregine, in a statement said GGDC should comply with the court orders and fund the the working capital account to complete the Medical City hospital and other work while the arbitration process proceeds.
To recall, last June 3, 2014 all work on the GGDC project at the Clark Freeport Zone was suspended indefinitely. This was the direct result of GGDC unilaterally removing all project development funds used by Peregrine from a WCA used by Peregrine for project development and construction.
“While there is a CA decision temporarily suspending for 60 days the preliminary injunction ordered by the RTC of Angeles City, Peregrine is still urging GGDC to respect the RTC decision which has not been reversed and continue funding the GGLC project to avoid the loss of jobs and spur the development of Clark,” Peregrine said.
The effect of closing the WCA, removal of all the money from that account and then continued refusal to replenish it resulted in the loss of 800 direct and indirect project employees in addition to many local vendors and suppliers unable to get paid for work performed. Despite the best efforts by Peregrine to avoid a project shutdown, including the new Medical City hospital, work had to be suspended due to the cessation of funding despite the fact that these funds had been previously planned, budgeted and approved to pay vendors, suppliers and employees, including work on the hospital.
Peregrine conceived the project in 2006 after signing an agreement with the Clark Development Corporation (CDC) to develop the site. Peregrine then completed environmental and land use studies and developed a conceptual master plan to create a modern aviation oriented logistics and business park adjacent to the Clark airport making it the country’s first Aerotropolis.
Peregrine then sought out third party financing which led to a Kuwaiti investor, agreeing to finance and fund the development.
The rights of the two parties is conformed in what is called an Engineering, Procurement and Construction Management (EPCM) Agreement.
It is the EPCM Agreement that is in dispute which was further worsened when the Kuwait entity removed all means to pay for work performed.Peregrine was therefore constrained to resort to the courts. Peregrine was granted a 72-hour temporary restraining order (TRO) on June 10, 2014 which was thereafter extended an additional 17 days on June 13, 2014. The TRO mandated that GGDC cease implementing the termination, fund the WCA account, and continue to maintain a status quo until the arbitration process in Singapore was completed.
Despite this, GGDC continued not to fund the project and made attempts to retake the project site. These actions led to the filing of an “Urgent Petition for Contempt.” On June 27, 2014, a Writ of Preliminary Injunction against GGDC was issued which effectively directed GGDC to “respect the terms of the EPCM agreement and continue to fund the GGLC project throughout the duration of the dispute.”
However, GGDC continued not to abide by the Writ of Preliminary Injunction.Peregrine also refuted reports that construction is presently taking place at GGLC.Contrary to other press releases there is no construction of any kind taking place on the GGLC project site or the Medical City hospital nor is there any active mediation taking place. The hospital which was hoped to be ready for the hosting of the 2015 APEC conference is also now seriously in jeopardy.
This dispute has caused a very real and serious impact to the local community at Metro Clark with hundreds of jobs lost and many subcontractors, suppliers and vendors not being paid. For the past six plus years Peregrine’s work as the developer and prime contractor of GGLC and has been evaluated by GGDC under the governing EPCM agreement on a quarterly basis.
Of the potential 100% award fee points possible to earn based on cost controls, adherence to schedule and value engineering, Peregrine has achieved a cumulative average of 96.7% with the last 10 successive quarters including the first quarter of 2014 being rated at 100%.
Peregrine questioned statements made by GGDC to accelerate funding and development of the GGLC project, this time committing $150 million to finish five office towers with a gross floor area of 145,000 square meters, a retail and gas plaza, and a hotel and serviced apartment complex by the end of 2015 creating employment opportunities for over 15,000 Filipinos from the region.
“Other proclamations over the last six years have similarly been heard which calls into question the validity and credibility of these most recent releases. It also calls into question why they do not just comply with the court orders and refund the WCA and complete the hospital and other work while the arbitration process proceeds,” Peregine said.
The project, while brilliantly conceived by Peregrine and has gained both national and international attention. It has suffered from the inability to adequately fund the pace of development required. “The Philippine government should note that GGDC has made little progress over the past six years they have held the site which one can rightfully attribute to inadequate funding,” Peregrine said.