SBMA shelves Redondo industrial estate project

The Subic Bay Metropolitan Authority (SBMA) has temporarily set aside the development program for the Redondo Peninsula following the collapse of an agreement with a firm that proposed the construction of an industrial estate and solar farm in the area.

SBMA Chairman and Administrator Wilma T. Eisma said the agency’s Board of Directors has decided to take a step back and called for the development of a master plan for the entire Redondo Peninsula before opening it up again to investors.

“We’re basically back to square one, because the project proponent was not able to honor the commitments under its very own proposal,” Eisma said.

“The SBMA is still open to receiving proposals though, should these be consistent with the SBMA’s objective of developing Redondo into an industrial and maritime hub,” she added.

The SBMA Board of Directors had earlier revoked the lease and development agreement (LDA) with Dynamic Konstruk International Eco Builders Corp. (DKIEBC), invoking an automatic revocation clause under the agreement in case the proponent did not meet its obligations.

Eisma said that despite several extensions given by SBMA, DKIEBC still failed to deliver the required advance rentals and security deposit, thus leaving the Subic agency with no other recourse but to revoke the contract.

According to SBMA records, Dynamic Konstruk initially proposed in May 2016 to develop 982 hectares of land at the Redondo Peninsula, which also hosts the Hanjin shipyard and the coal-fired thermal plant project of Redondo Peninsula Energy Inc.

Calling the project “Redondo 200MW Solar Farm and Eco Dynamic Industrial City”, DKIEBC said it will devote 400 hectares of the project site to a solar-power generation farm and 582 hectares to an industrial hub.

During negotiations for the project’s 50-year lease, however, it became apparent that DKIEBC, a certified “A” PCAB licensee, as well as its partners, lacked adequate experience in solar power generation. It also seemed not to have enough funding to back up its US$798-million investment commitment.

Eisma said the SBMA Board required a P2.2-billion paid-up capital, and DKIEBC made a counter-offer to pay upfront the amount of P472 million, which is equivalent to 50 percent of its rental and security deposits.

“When DKIEBC also failed to honor this commitment, the project was considered revoked pursuant to a resolution of the SBMA Board,” Eisma added.

As of now, the SBMA has stopped dealing with the company on the aborted project. It had also warned the public on reports that some parties are still seeking investors to fund the project despite official revocation by the agency.

“This is already a closed issue. Anybody seeking funds for the Redondo industrial city and solar farm project is probably doing some scam operation, so we urge everyone to beware,” Eisma concluded. (HEE/MPD-SBMA)

PHOTO:

Perspective of the supposed development project proposed by Dynamic Konstruct at the Redondo Peninsula in Subic Bay Freport.

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SBMA keeps upbeat mood in 1st half

Good news kept coming out of the Subic Bay Freeport in the first half of this year, as the Subic Bay Metropolitan Authority reported continuing growth in revenue, dividends, investments, exports and tourism.

In a report to President Rodrigo Duterte, who is set to make his first State of the Nation Address on July 24, the SBMA indicated increases in all aspects of its performance from January to May this year, said SBMA Administrator Wilma Eisma.

She said that in terms of the agency’s financial performance, it recorded a 7.7 percent growth in revenue from a total of P1.16 billion in the first five months last year to P1.25 billion in January-May 2017, and a 3.4 percent increase in operating income for the same period.

“But the most revealing item here is SBMA’s net income which went up by more than 126 percent, because from the P106.27 million that was recorded in January-May 2016, we’re now at P240.21 million in just the first five months this year,” Eisma said.

“Apparently—and this cannot be denied—the SBMA has continued well in its growth path in the last few years and we are actually breaking old records here,” she added.

Eisma also said that because of the upsurge in its financial performance, the SBMA has managed to contribute bigger shares to the government than ever before.

This includes a 30.58 percent increase in the revenue shares to local government units that went from P115.22 million in the first half last year to P150.46 million this year; and a 30.42 percent increase in the government’s 3% share from the gross income earned in the Subic Bay Freeport, which rose from P178.37 million in January-May 2016 to P232.63 million in the same period in 2017.

Still, the dividends paid by the SBMA to the national government through the Bureau of Treasury, Eisma added, reached a huge 352.7 percent increase, as actual remittances grew from P145.91 million to P660.69 million.

Eisma said the favorable financial picture in Subic also extended to new investment commitments, which surged by 642 percent from P5.6 billion in January to May 2016, to P40.55 billion in January-May 2017. Likewise, the number of new business locators grew by 58, bringing the total number of Subic-registered businesses to 1,527, while expansion projects of existing locators jumped by 85 percent, or from 13 last year to 24 this year.

“The huge increase in new investment commitments is due primarily to the approval of the investment project of Dynamic Konstruk International Eco Builders Corp. (DKIEBC), which amounts to P39.92 billion,” Eisma explained.

DKIEBC will engage in general construction, renewable energy and industrial hub development at the Rodondo Peninsula, with projected employment ranging from a minimum of 10,000 to a maximum of 50,000.

Eisma said other major business developments in Subic this year included the soft opening of Datian Subic Corp.’s shoe factory, which now employs 1,000 workers; the ground-breaking of Toyota Subic, Inc.’s P150-million multi-level showroom and service center; the start of Teekay Swan’s and JOVO’s ship-to-ship transfer operations with an expected annual port revenue of P200 million; and the start of DM Leisure Corp.’s P4.6-billion golf course and leisure complex project.

Meanwhile, the SBMA also gave positive reports in tourism, with a 1 percent increase in visitor arrivals and a 3 percent growth in actual revenues that stood at P10.54 million in January-May 2017.

Relative to tourism, Eisma also reported that the Subic Bay Freeport became the first free port zone in the country to have declared non-smoking zones in compliance with President Duterte’s EO 26 that called for the establishment of smoke-free environments in public and enclosed places. (HEE/MPD-SBMA)

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SBMA okays US$798-M solar farm and industrial city project

More manufacturing companies and light to heavy industries are expected to locate in this premier Freeport, as the Subic Bay Metropolitan Authority (SBMA) approved the development of a 982-hectare industrial estate at Subic’s Redondo Peninsula.

SBMA Chairman Martin B. Diño and SBMA Administrator Wilma T. Eisma announced the approval of the US$798-milion project proposed by Dynamic Konstruct International ECO Builders Corp. (DKIEBC), a duly-registered enterprise inside the Subic Bay Freeport Zone.

The proposed project site for the solar farm and industrial city at the Redondo Peninsula

“This project is our answer to the inquiry of investors looking for thousands of hectares of flat land for manufacturing and light to heavy industries inside the Subic Bay Freeport Zone,” Chairman Diño said during the State of the Freeport Address (SOFA) hosted by the Subic Bay Freeport Chamber of Commerce (SBFCC) last Monday.

He added that the SBMA has been conferring with nearby local government units to identify more areas suitable for the development of industrial estates that will be under the Subic Bay Freeport’s tax- and duty-free regime.

Administrator Eisma meanwhile pointed out that the proposed solar farm and industrial city, when fully realized, will generate about 50,000 new jobs.

“When the Subic Naval Base closed down in 1992, we were all so depressed to be losing the 35,000 jobs generated by the US Navy. But under the SBMA we have long surpassed those numbers— as of February 2017 our active workforce within the Freeport is 115,272—and we keep on working to bring about more employment,” she added.

The SBMA officials also clarified that out of the $798-million investment commitment, the DKIEBC will spend about $300 million for the proposed 402-hectare solar farm, which is designed to produce 200 megawatts of green energy to primarily supply the proposed 580-hectare industrial city.

The industrial city project will include commercial buildings, factories, warehouses, utilities for water and electricity, fire and law enforcement facilities, and sanitation and landfill facilities.

According to DKIEBC, the solar farm shall primarily benefit the investors and locators of the industrial city with green and low-cost energy supply and reduce the risk of exposure from the spot market. (NBM/MPD-SBMA)

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