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Subic Bay Metropolitan Authority (MPD-SBMA)

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29 June 2010

SBMA seeks legal advice on award to HCPTI

THE Subic Bay Metropolitan Authority (SBMA) is making sure its award of contract to the Harbour Centre Port Terminals Inc. (HCPTI) for the operations of the international port is legal in every way by asking for a legal opinion from the Office of the Government Corporate Counsel (OGCC).

Armand Arreza, chief executive officer and administrator of the SBMA, said the SBMA is also reviewing all the documents submitted by HCPTI. “I expect the OGCC opinion to come out by mid-July, and then we will have to wait for their notice to proceed before we award the contract.”  

He said they made the move so future administrations will not try to overturn or question the decision to award the contract to the private port operator, or at least make it difficult to do so.

SBMA is forming a joint venture with Harbour Centre for the operation of the entire Naval Supply Depot (NSD), a port that currently handles mostly general cargo such as fertilizers and grains.

He is convinced the joint venture can operate the port smoothly because of Harbour Centre’s experience in both Manila Harbour Centre and the Manila North Harbor.

“We have made our due diligence, and we found out that Manila Harbour Centre is almost full, and we expect that we can handle their spillover volume,” added Arreza.

Earlier, Harbour Centre chief executive officer Michael Romero said the company will spend about P6 billion to P8 billion over the 25 years of the contract for improvements.

Romero said their winning the award for the Subic port is just in time to complement the operations of their private Manila container port, since the facility has already reached 95 percent of its capacity.

The terms of reference of the deal with SBMA show the Romero-owned company assures the government of fixed fees of $500,000, or P23 million, for the first year of operation, with the contribution gradually rising to $600,000 in the second year and so on, with yearly rises to a final $1.5 million in the 25th year.

Romero said that if the cargo volumes shoot up to more than 2 million tons in the NSD, Harbour Centre will pay the SBMA an additional 20 percent of the gross revenues. In total, the SBMA said Harbour Centre committed $32 million, or about P1.53 billion, for fixed and guaranteed revenue share of government over the 25-year joint-venture period.

According to the SBMA figures, the nine other port handlers managed 2.21 million tons of noncontainerized cargo in 2009, some 1.8 million tons of bulk and break-bulk cargo with the rest being transshipments, heavy equipment and roll-on/roll-off goods.

Last year the SBMA earned P30.1 million from the nine cargo handlers in handling fees and P8.5 million from warehouse rental and storage fees. (VG Cabuag, Business Mirror)

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