The Department of Environment and Natural Resources Office in Quezon City. (PNA photo by Marita Moaje)
The Department of Environment and Natural Resources (DENR) has officially terminated its agreement with Blue Star Construction Development Corporation (Blue Star), the developer behind Masungi Georeserve, citing irregularities in a government housing project.
During a press briefing at the DENR headquarters in Quezon City on Friday, Assistant Secretary for Legal Affairs Norlito Eneran explained that the decision was driven by the absence of a proper bidding process and the company’s failure to deliver the promised housing units.
In a formal letter to Blue Star owner and Masungi Georeserve proponent Ben Dumaliang, the DENR outlined key reasons for the cancellation of the supplemental agreement. These include:
- The lack of a required Presidential Proclamation designating the land for housing purposes.
- The absence of documentation proving that the project underwent standard procurement or bidding procedures.
- The failure to complete the 5,000-unit Garden Cottages housing project within five years of signing the agreement on November 15, 2002.
Eneran detailed that Blue Star initially entered a joint venture agreement with the DENR in 1997 for the survey, design, construction, development, and marketing of the Garden Cottages project on a 130-hectare government property in Tanay, Rizal. However, in 2002, an additional 300 hectares were awarded to the company despite its failure to develop the original site.
“In 1997, Blue Star committed to developing 5,000 housing units. Another agreement in 2002 added another 5,000 units. However, none of these units were delivered, nor was there any record of a proper bidding or procurement process,” the DENR stated.
The housing project was intended for employees of multiple government agencies, including the DENR, Department of Education, Department of the Interior and Local Government, Department of National Defense, Department of Transportation, and the Office of the President.
The additional housing units covered under the 2002 supplemental agreement were planned for Lot 10, a site where the Dumaliang family has since constructed structures and now operates Masungi Georeserve. The nature reserve charges visitors for access to its caves, stone formations, trails, and rope bridges.
“The Garden Cottages, which were originally designated as housing for government employees under the 1997 agreement, are now being used as venues for weddings and pre-nuptial photo shoots—services for which the Dumaliangs charge fees,” the DENR noted.
Eneran emphasized that since Blue Star never fulfilled its obligations under the original joint venture agreement and failed to conduct a bidding process within the designated five-year timeframe, the 2002 supplemental agreement has no legal standing.
He added that the contract was among those investigated by a DENR special committee beginning in July 2019.
“Multiple investigations conducted across different administrations have uncovered irregularities in the awarding of Blue Star’s contracts,” Eneran said.
With the termination of the agreement, the DENR is expected to take further action regarding the disputed land and ensure accountability for the failed government housing project.