A MANILA Trial Court has sided with the private firm operating the carpark in a financial row with UST, prompting the University administration to file an appeal to overturn what it thinks is a “glaringly erroneous” ruling.

Presiding Judge Paulino Gallegos of the Manila Regional Trial Court (RTC) Branch 47 on Jan. 29 ordered defendant UST to pay Selegna Holdings Corp. P186 million representing revenue losses supposedly caused by deviations from a 15-year build-operate-transfer (BOT) contract.

“Defendant UST is hereby directed to strictly comply with the terms and conditions of the contract on the yearly escalation of the parking fee covered by the BOT,” the decision stated.

The decision, a copy of which was obtained by the Varsitarian from the Manila RTC, also ordered UST to prohibit motorists from using other campus parking spaces, internal roads, and a vacant lot near the UST Hospital, in keeping with the agreement.

The BOT contract was executed in December 2004, paving the way for the construction of the P247 million multi-deck carpark.

Damages and shortfall

Selegna, a Makati firm, borrowed P140 million from Metrobank to finance the construction, at an annual interest of 16 percent.

The contract has Selegna charging stipulated parking fees, leasing commercial spaces, collecting the monthly rentals and hourly parking fees, paying UST a monthly royalty and 10 percent of gross receipts, and remitting the net to Metrobank.

However, in 2006, Selegna allegedly started losing money because of the following: UST allowed parking along internal roads; student parking rates were not adjusted; the annual five-percent increase in parking rates was not implemented; parking spaces on all floors were converted into elevator lobbies, and; commencement of full operations were delayed due to the construction of levels three and four as well as the UST-Alfredo M. Velayo College of Accountancy.

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As a result, Selegna was unable to meet loan repayments to Metrobank. “UST was fully aware of the shortfall of the BOT revenues and that Selegna cannot fulfill the servicing debt with Metrobank for the P140 million and P107 million loans,” the order stated.

Of the total amount granted by the court, P35,017,109.15 represents loss of revenue on parking and commercial spaces, P2,837,229.79 is for the spaces converted into elevator lobbies, and P4,643,396.85 is for judicial and filing fees. UST must also pay P1,500,000 in lawyers’ fees. The remaining P143,713,873.48 is for “accrued rentals” of the College of Accountancy, with 12 percent annual interest.

Appeal

However, Faculty of Civil Law Dean Nilo Divina, whose law firm represents UST, called the judge’s ruling “erroneous.”

“We already raised the matter before the Court of Appeals,” Divina said.

The law dean also said UST was considering filing an administrative charge against Judge Gallegos for allegedly having what was “clearly a bias.”

Both parties have been contesting the contract’s provisions since 2009.

On April 28 that year, plaintiffs Selegna and its owner Edgardo Angeles filed a petition for declaratory relief with motion for issuance of a temporary restraining order. Selegna’s move was meant to let the court to interpret the conditions of the BOT contract. This was later converted into the regular civil case now subject of the court’s decision.

UST and Selegna had also tussled in court over lease contracts of carpark tenants.

The Varsitarian tried to seek comments from Selegna but it had yet to respond as of presstime. Reden D. Madrid

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