The Department of Environment and Natural Resources (DENR) has cancelled a 2002 agreement with government housing contractor Blue Star and given it 15 days to vacate a 430-hectare area that includes the Masungi Georeserve in Tanay, Rizal.
In a letter to Blue Star owner and Masungi Georeserve proponent Ben Dumaliang, the DENR cited three reasons for cancelling the agreement:
1. absence of a required Presidential proclamation designating the land for housing purposes,
2. failure to follow the necessary procurement of bidding process; and
3. non-delivery of the 5,000-unit housing project within the agreed five-year period.
In a press conference held on March 7, DENR Assistant Secretary for Legal Affairs Norlito Eneran said that Blue Star initially signed a Joint Venture Agreement (JVA) with the DENR in 1997 for the survey, design, construction, development, and marketing of a project called “Garden Cottages” on a 130-hectare government property in Tanay, Rizal Province.
“Blue Star was still able to secure a supplemental agreement in 2002 that even increased their project area to an additional 300 hectares, despite no substantial housing units built on the original 130 hectares awarded,” he added.
Eneran said that since the original JVA for the housing project was never executed and no bidding process occurred despite the five-year timeline, “the 2002 Supplemental Agreement is now without basis.”
The intended beneficiaries of the housing units were employees of various government agencies, including the DENR, the Department of Education (DepEd, then Department of Education, Culture, and Sports), the Department of Interior and Local Government (DILG), the Department of National Defense (DND), the Department of Transportation (DOTr, then Department of Transportation and Communications), the Office of the President, and the Presidential Management Staff.
The additional government housing units covered by the 2002 Supplemental Agreement were to be located in Lot 10, where the Dumaliang family also built structures and currently operates the Masungi Georeserve, a resort that charges visitors for day treks to caves, stone formations, trails, and rope bridges.
The Garden Cottages, covered by the 1997 JVA and which were originally intended as housing for government employees, are now venues for weddings and pre-nuptial shoots for which the Dumaliangs also charge a fee.
The DENR explained that the 2002 Supplemental Agreement lacked the required Presidential Proclamation that should declare Lot 10 as open for disposition to develop housing units within the area. Said area was registered and later transferred to the Bureau of Corrections and DENR Region IV-A (Calabarzon).
The 2002 Supplemental Agreement was among the contracts investigated by the DENR Special Committee, which was established on July 2, 2019, per Special Order 2019-446.
"Multiple investigations by different administrations have found irregularities in the awarding of Blue Star's contracts," Eneran said.
