Philippines woos investors to develop Clark Green City


Posted at Jun 18 2014 05:22 PM | Updated as of Jun 19 2014 06:07 PM

An artist's perspective of Clark Green City

MANILA - The Philippines plans to auction off by the end of the next quarter rights to the development of a 1,300-hectare (3,212-acre) lot in a former U.S. base now being converted into a new city and special economic zone, a government official said on Wednesday.

The planned 9,500-hectare (23,475-acre) Clark Green City in the Clark Special Economic Zone, north of the capital, Manila, will be the Southeast Asian nation's first city to be built from the ground up outside the sprawling capital region of nearly 12 million people.

The area up for auction could bring in P3.9 billion ($88.9 million) for state coffers, Reuters calculations based on 2013 prices show, although the government says it is revising land values upward.

Clark Green City is estimated to generate 1.57 trillion pesos ($35.8 billion) worth of economic activity annually and create nearly a million new jobs when development is complete, government studies show.

Terms for tenders of the planned city's first phase are being readied and could be out as early as August, Arnel Paciano Casanova, president and chief executive of state-run Bases Conversion and Development Authority (BCDA), told Reuters.

"Investor interest is high," Casanova told Reuters, but he refused to identify interested companies due to non-disclosure pacts. Both foreign and local investors may bid.

Clark Green City is intended to ease congestion in Manila, Casanova told a news briefing, forming the urban core of the central region of main island Luzon and dictating the development of its surroundings.

Auction proceeds will go to the state, designated mainly for the modernisation of the Philippines' armed forces. A law on specialised economic zones allows for the contracts to be awarded through competitive bidding or joint ventures.

The 1,300-hectare plot is split into five lots under separate contracts. These involve a 50-year development term and lease, with a possible extension of 25 years for each.

The government is updating the land value of the areas up for tender, but it was worth P300 ($6.84) per square metre in 2013, BCDA business development manager Arrey Perez told Reuters. He expects the price to spike after the city's masterplan was approved by President Benigno Aquino last month.

Market reaction in the first phase of the auction is likely to dictate the size, pace and value of tenders for succeeding lots.

The development of utilities, waste management facilities, telecoms and transport systems, as well as a food terminal project in the planned city could be auctioned under a public-private partnership scheme starting next year, Casanova told the briefing.