In August 1990, the Mandaluyong city market burned down.
In order to recuperate from this tragedy, the city government
started to look for ways to get P50 million to rebuild the
market. Unfortunately, taking a loan from the bank is out
of the question, since no bank would lend at lower than
an interest rate of 18 percent or P9 million per year. The
city government found a solution to this in the Build, Operate,
and Transfer Law (BOT).
With the law, the city government was able to start
the bidding for the construction of the new market/commercial
complex. After three tries, the Macro Founders and Developers
(MFD), a business conglomerate that was organized for this
project, won. MFD started building a seven-story building
on the old market site. This commercial complex comes complete
with a parking lot, movie theaters, bowling alleys, shops,
and offices. The ground floor of the center was a market,
which will be fully taken cared of by the city government.
The city government did not shell out a single cent
for the building of the infrastructure that cost P550 million.
In return for this investment, MFD owns the facility for
40 years in order for the conglomerate to recover its investment
before transferring the title to the city government.
In addition to the millions of pesos saved, this
project provided almost 600 jobs for Mandaluyong residents.
500 people, most of them victims of the fire, now have their
own stalls in the market. Some more people are tasked to
maintain the market itself. This single infrastructure change
stimulated economic activity in the surrounding neighborhood.
It is also estimated to generate an income of P30 million
for the city. With all the visible development this project
has initiated, the BOT project has already attracted the
attention of other city governments and even international
organizations that wish to replicate this initiative.
