The Department of Environment and Natural Resources (DENR) announced on Friday the cancellation of its 2002 Supplemental Agreement with government housing contractor Blue Star Construction Development Corporation (Blue Star) due to its illegality, lack of proper bidding, and failure to execute the project.

Following investigations that began in 2014, the DENR issued a letter to Blue Star owner and Masungi Georeserve proponent Ben Dumaliang, outlining the reasons for the cancellation of the agreement.

These include: (1) the absence of a Presidential Proclamation declaring the subject matter of the contract for housing purposes, (2) no evidence that the proposed construction went through the required procurement or bidding process, and (3) Blue Star’s failure to deliver the 5,000-unit Garden Cottages housing project within five years of the agreement’s signing on 15 November 2002.

The intended beneficiaries of the housing units were employees from various government agencies, including the DENR, Department of Education (formerly the Department of Education, Culture and Sports), Department of the Interior and Local Government, Department of National Defense, Department of Transportation (formerly the Department of Transportation and Communications), Office of the President, and the Presidential Management Staff.

The additional government housing units covered by the 2002 Supplemental Agreement were to be built on Lot 10, an area where the Dumaliang family has since developed structures and currently operates the Masungi Georeserve, a resort charging visitors for day treks to caves, stone formations, trails and rope bridges.

The Garden Cottages, initially intended as housing for government employees under the 1997 Joint Venture Agreement, are now being used as venues for weddings and pre-nuptial shoots, for which the Dumaliangs also charge a fee.

The DENR also cited the lack of the required Presidential Proclamation, which should have declared Lot 10 as open for housing development. The area was registered under the Republic of the Philippines in Original Certificate of Title (OCT) 3556, later transferred to the Bureau of Corrections and DENR Region IV-A (Calabarzon).