Erap City

A HIGH school classmate of President Joseph Estrada wangled a P2.8-billion peso mass housing project in the mountains of Rodriguez (Montalban) in Rizal intended for as many as 1.2 million residents in Metro Manila, most of them supposedly from the urban poor.

Former Housing chief Karina David said Antonio Evangelista, president and general manager of Kanlaon Construction Enterprises Co., Inc. lobbied with the President for the approval of the Erap City project which spans five barangays and stretches across 2,500 hectares.

Evangelista is reported to be a partner of New San Jose Builders, which got the housing contract. New San Jose, various informed sources say, also built the 'Boracay' mansion as a gift for President Estrada, while Evangelista's Kanlaon Construction has figured in the construction of another mansion in Forbes Park for a presidential mistress.

The Montalban housing project was first conceived during the Ramos administration. A master plan prepared by Palafox Associates says that the first phase of the project will cover only 600 hectares: the 400-hectare Suburban area and the 200-hectare San Jose Plains, which includes the Kasiglahan I project, began during the presidency of Fidel Ramos.

"Pagka-nagsasalita si Erap about Kasiglahan or New San Jose Plains, it was always Tony Evangelista ... Sasabihin sa akin, hindi pa raw nababayaran sila Tony (Whenever Erap would talk about Kasiglahan or New San Jose Plains, it was always Tony Evangelista ... He would tell me that Tony has not yet been paid)," David said.

The project, the centerpiece of the Estrada administration's housing program, has been touted as the "first ever well-planned socialized housing city undertaken in the country."

Evangelista, who frequents the Palace, is a member of the inner circle of Estrada and has been reported to be a partner of Jose L. Acuzar, chairman of the board of New San Jose Builders.

It was New San Jose that renovated Estrada's mansion at 100 11th Street, New Manila in Quezon City, also known as "Boracay" because of its white sand, wave machine and swimming pool. Three engineers of New San Jose applied for barangay permits, records at the barangay office show.

Evangelista's Kanlaon Construction Enterprises also applied for permits to demolish existing houses at Stanford St. in Wack Wack Village and Buendia St. in Forbes Park. It is also the contractor for the Forbes Park mansion of Guia Gomez, one of the mistresses of Estrada.

Both Evangelista and Acuzar declined to be interviewed.

Informed sources said there are indications the Boracay mansion, which sits on a 7,000-square meter property previously owned by the Madrigals, was given as a "gift" to the President in exchange for the Erap City contract.

The property was bought on October 1, 1999 by St. Peter Holdings Corp., a shell corporation formed three months before by the de Borja law firm upon the request of Edward Serapio, Estrada's undersecretary for political affairs and a founding partner of the law firm.

Our earlier investigations revealed that the shares of the company that owns the property were endorsed to Jose 'Sel' Luis Yulo, who had been appointed by Estrada presidential adviser on socialized housing. Yulo was at loggerheads with David, who was initially put in charge of the government housing program. David resigned on October 15, 1999, wondering why Estrada could not let go of Yulo.

"Sel Yulo was not just a traveling companion. They had a longer term relationship where there were deals like the New Manila property, and ties could not just be cut by displeasing him," David said.

Earlier this month, Yulo said in an affidavit submitted to the National Bureau of Investigation that he was holding the New Manila property in trust for Jaime Dichaves, another close friend of Estrada.

Government Guarantee
Our investigation shows that New San Jose was, in many ways, a contractor favored by the Estrada government.

Formed in 1986, New San Jose has a long history of building government-funded low-cost housing projects. Acuzar, its owner, was a former draftsman at the National Housing Authority who has managed to win the favor of different administrations.

Besides the Pabahay sa Riles project under the Ramos administration, New San Jose also worked on the Lung Center, military housing in Bulihan, Pag-ibig City and Government Service Insurance System (GSIS) City in Bacoor, Fairview housing, and the teachers' housing in Carmona, among others.

"New San Jose maintains close relations with every administration because it always manages to find someone with close connections to the government and would make that person a member of the company," David said. In the case of the Estrada administration, Evangelista was the crucial link.

When Ramos reached the end of his term in 1998, New San Jose reported losses of P20.5 million and was saddled with a P630-million tax case with the Bureau of Internal Revenue.

According to other developers, New San Jose bounced back and caught Estrada's attention when it rebuilt—for free—an orphanage in Paco that burned down in 1998. The work was not only done gratis, it was also done quickly.

With Evangelista speaking on its behalf, New San Jose managed to bag the 100-percent bond guarantee from what was then the Home Insurance Guaranty Corporation. The guarantee was originally for the Pabahay sa Riles project, which built tenement houses alongside Manila's railroad tracks, under the Ramos administration.

It was Acuzar, said David, who sought the transfer to the Erap City project of the Pabahay Sa Riles guarantee. She said she opposed it because the risks were too high and Acuzar's P600-million investment in equipment and land did not appear commensurate to government's P2.8-billion exposure.

New San Jose, however, managed to swing the deal after she left government, and Erap City was inaugurated on the same month that David resigned.

The government guarantee covered the Suburban Housing Participation Certificates that were issued and sold to government agency investors. The Social Security System (SSS) invested P1.7 billion, while Land Bank put in P.7 billion. The NHA, for its part, would buy at least 7,000 housing units from New San Jose. In effect, the company did not have to put out any cash for the project.

Homes for the Poor?
The cheapest housing units at Erap City measure 20 square meters and cost P180,000. Those who move into them must pay a monthly amortization of P1,437.54, a January 2000 brief prepared by the Home Guaranty Corporation says. In addition, according to the brief, a P3,000- reservation fee and a P16,500 miscellaneous fee will be required of residents.

At a Senate Urban Planning, Housing and Resettlement committee hearing on May 16, 2000, housing officials said only members of Pag-ibig, SSS, or the GSIS can avail themselves of Erap City houses. The same officials said they have yet to draw up a socialized housing fund that the urban poor can tap to buy houses with special lending terms.

This prompted socialized housing advocates from the Institute of Church and Social Issues to point out during the Senate hearings that Erap City is "not for the poor" but for the "upper income group."

Besides financing, urban poor and socialized housing advocates have pointed out environmental and land use problems. For instance, development began without an Environmental Compliance Certificate (ECC).

A notice of violation was issued by the Environmental Management Bureau on February 24, 2000, two days after development of the Suburban area began. The firm paid a P50,000-fine on June 2, 2000, applied for an ECC, and got one on June 8, 2000.

New San Jose officials said they thought that the previous ECC they obtained for Kasiglahan I covered the expanded area, too.

The project is situated in the flood plains and is close to three watershed areas-Angat, which supplies 97 percent of Metro Manila's water; Marikina; and the La Mesa Dam of Novaliches.

Phivolcs director Raymundo Punongbayan also said that 60 houses in the Suburban area are right smack on the Western Marikina Fault Line. He recommended that they be demolished.

Residents interviewed complained about inadequate basic and school facilities. As many as 70 to 80 students crowd in 20 to 56-square meter makeshift classrooms.

Farmers have also been dislocated after the Agrarian Reform department ruled, favoring conversion of agricultural land to residential use. The case is under appeal.

"Kung ito ang center-piece project for housing ng gobyerno, nakakatakot isipin kung ano iyong hindi," Lia Esquillo of the non-government organization Kaisahan said. (If this is government's centerpiece project, it scares me to think about other housing projects that are not.)