SBMA-HCPTI deal to spur growth in Subic Port

Subic Bay Metropolitan Authority (SBMA) Chairman and Administrator Jonathan D. Tan predicts that the P5.5-billion joint venture between the agency and the Harbour Centre Port Terminal Inc. (HCPTI) will spur growth in the port businesses of this premier Freeport.

During the inauguration of the Subic Port at the Naval Supply Depot (NSD) here, the 10-year Subic Port joint venture will revitalize the ports, yards, and cargo handling inside this Freeport. The JV also includes the development, operation and management of several ports inside the former US naval base.

“Our goal at SBMA is in line with HCPTI’s goal of creating more employment opportunities, generate new income, boost the tourism, attract more foreign and local investments, and expand the trading business in Subic,” he said.

He added that the upgrade of the port facilities is expected to improve cargo processing efficiency, reduce ship turnaround times, and increase the volume of bulk and break bulk cargo handled.

HCPTI Chairman Regis Romero II said that with the inauguration of the Subic Port operation, the country is now able to provide enough buffer from global inflation and regional conflicts. He cited that unrest in Ukraine and Israel has put a damper on the global economy.

“Sustainability in business may face threats due to some uncertainties, especially from external forces like the unrest in Ukraine and Israel. But I remain confident, considering that our economy can withstand external shocks which has been proven many times over – from the 1997 Asian financial crisis to the 2008 global economic meltdown and all the way to the recent covid-induced market slump and worldwide inflation,” Romero said.

“Thanks to the fact that our economy is driven by consumption such that the nation can consume what it can produce. To a large extent, it makes our economy virtually self-sustaining. But to ensure economic expansion amid the growing domestic requirements, we have to trade beyond our borders and attract foreign capital and technologies,” Dr. Romero II stressed, apparently hinting at the priority goals of the SBMA-HCPTI joint venture. (MPD-SBMA)

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SC reverses CA; reinstates trial court order on P5.5-B SBMA-HCPTI contract

The Supreme Court (SC) has reversed the 2013 decision of the Court of Appeals (CA) as it reinstated the 2012 trial court ruling which ordered the Subic Bay Metropolitan Authority (SBMA) to award the P5.5 billion contract to Harbour Centre Port Terminal, Inc. (HCPTI) for the development, operation and management of several ports inside the Subic Special Economic and Freeport Zone.

The 2012 ruling of the Olongapo City regional trial court (RTC) directed SBMA to issue a notice of award (NOA) and notice to proceed (NTP) to HCPTI for the joint venture projects covering the Naval Supply Depot, Boton, Alava, Rivera and Bravo Wharfs/Point.

In reversing the trial court, the CA said that the SBMA has no legal duty to issue the NOA and NTP because “the SBMA has the discretion to either approve or reject the recommendation to award” and that HCPTI “has no vested right to the issuance of the NOA and the NTP.”

The SC, in a decision written by Associate Justice Rodil V. Zalameda and made public last May 18, said:

“In sum, there is no law justifying the non-issuance of the NOA due to the withdrawal of the NEDA (National Economic Development Authority) endorsement. Petitioner (HCPTI) has complied with all the legal requisites for the issuance of the NOA. As such, a writ of mandamus may issue to compel SBMA to perform its legal duty.

“The Decision dated 12 January 2012 of Branch 72, Regional Trial Court of Olongapo City in Civil Case No. 108-0-2011 is hereby REINSTATED. SO ORDERED.”

On Nov. 16, 2009, SBMA received an unsolicited proposal from HCPTI to enter into an unincorporated joint venture (JV) for the development, operation and management of the ports in the Subic freeport zone. The JV envisioned a consolidation of the break-bulk, bulk and other essential port services to achieve efficiency of port resources.

HCPTI’s proposal was done in line with the 2008 Guidelines and Procedures for entering into JVA between government and private entities issued by NEDA.

However, on July 5, 20211, NEDA withdraw its endorsement of the project based on alleged violation of the 2008 JV guidelines, such as the execution of the agreement as early as stage two of the process and a supposed material change in the project cost from approximately P763 million to P5.37 billion after the competition challenge.

The Office of the Government Corporate Counsel (OGCC), which had found the agreement between SBMA and HCPTI valid, recommended the suspension of the NTP in view of NEDA’s withdrawal of its endorsement.

Due to SBMA’s failure and refusal to issue the NOA and NTP, HCPTI filed a petition for mandamus before the Olongapo RTC. During the pendency of the petition, NEDA denied SBMA’s motion and reiterated the withdrawal of its endorsement.

“It appears that there is no legal or contractual obstacle to the issuance of the NTP. Hence, the same must also be issued to petitioner in preparation for the implementation of the JVA (joint venture agreement), and so that the parties may start complying with other conditions precedent stipulated therein.

“WHEREFORE, premises considered, the petition is hereby GRANTED. The Decision dated 08 August 2013 and Resolution dated 14 January 2014 of the Court of Appeals in CA-G.R. SP No. 125330 are REVERSED and SET ASIDE.

“The Decision dated 12 January 2012 of Branch 72, Regional Trial Court of Olongapo City in Civil Case No. 108-0-2011 is hereby REINSTATED. SO ORDERED.”

“In this case, all the requisites for the issuance of the NOA had already been complied with. The existence of these requisites gave rise to a clear legal right in favor of petitioner and correlative ministerial duty upon SBMA,” the SC said. (Manila Bulletin)

Source: https://mb.com.ph/2022/05/23/sc-reverses-ca-reinstates-trial-court-order-on-p5-5-b-sbma-hcpti-contract/

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Ex-SBMA executives cleared of graft raps

SUBIC BAY FREEPORT, Philippines – The Office of the Ombudsman has cleared former officials of the Subic Bay Metropolitan Authority (SBMA) of graft charges over a 2010 port operations deal.

In its Feb. 3 order released this month, the ombudsman dropped the charges against former SBMA chairman Feliciano Salonga and former SBMA chief executive officer administrator Armand Arreza for violation of the Anti-Graft and Corrupt Practices Act and grave misconduct.

The order also reinstated SBMA senior deputy administrator Ramon Agregado and SBMA deputy administrator Marcelino Sanqui, who reassumed their positions on March 17.

Also cleared of the charges were former senior deputy administrator Ferdinand Hernandez former deputy administrator Ma. Cristina Millan and former SBMA board members Edralino Cajudo, Antonio Rex Chan, Ricardo Coscolluela, Angelita DJ Cruz, Teodoro del Rosario, Jorge Estanislao, Ma. Angela Garcia, James Lorenzana, Ma. Victoria Pineda, Stefani Saño, Jennifer Khonghun-Ting and Eddie Tamondong.

The charges against businessmen Reghis Romero II and Michael Romero, chairman and chief executive officer, respectively, of Harbour Centre were also dropped.

Ombudsman Conchita Carpio-Morales dismissed the complaints filed by Subic Seaport Terminal Inc. and Amerasia International Terminal Services Inc. against the former SBMA officials for lack of merit.

“The SBMA’s act of signing the joint venture agreement was irregular, but insufficient to constitute manifest partiality or evident bad faith,” Morales said in her order.

Charges were filed against SBMA and Harbour Centre over a 25-year joint venture agreement for the development, operation and management of the naval supply depot and the ports in Boton, Alava, Rivera and Bravo inside the free port. (Bebot Sison Jr., Philippine Star)

http://www.philstar.com/nation/2015/03/26/1437455/ex-sbma-executives-cleared-graft-raps

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SBMA revamped after key officials’ ouster

The Subic Bay Metropolitan Authority (SBMA) has reshuffled several of its key managers after the Office of the Ombudsman ordered the dismissal of three agency officials in connection with a flawed port contract.

SBMA Chairman Roberto Garcia said the SBMA board held a special meeting last Friday and approved the appointment of Joy Alvarado, officer in charge of the SBMA Regulatory Group, as OIC senior deputy administrator (SDA) for the SBMA Business Group; and Marco Estabillo, manager of the SBMA Engineering Department, as OIC SDA for operations and concurrent OIC deputy administrator for public works.

The SBMA board also appointed OIC Deputy Administrator (DA) for Business Reuel John Kabigting as OIC for regulatory; Ronnie Yambao as OIC DA for business development; Anna Joy Quinto as OIC for business accreditation; and Gary Fernandez as OIC for engineering department.

The appointments took effect on Monday.

Garcia said Alvarado replaced Stefani Saño as SDA for business, while Estabillo took over the post of Marcelino Sanqui.

Saño and Sanqui, along with SDA for support services Ramon Agregado, are the only sitting officials among the 18 SBMA officials indicted by the Ombudsman last month for allegedly rigging a joint-venture agreement (JVA) in 2010 for the development, operation and management of the Naval Supply Depot logistics area here and the ports of Boton, Alava, Rivera and Bravo.

Those indicted included former SBMA Chairman Feliciano Salonga; former Administrator and Chief Executive Officer Armand Arreza; ex-Senior Deputy Administrator Ferdinand Hernandez; ex-Deputy Administrator Ma. Cristina Millan; and ex-Board Members Edralino Cajudo, Antonio Rex Chan, Ricardo Coscolluela, Angelita Cruz, Teodoro del Rosario, Jorge Estanislao, Ma. Angela Garcia, James Lorenzana, Ma. Victoria Pineda, Saño, Jennifer Khonghun-Ting and Eddie Tamondong.

Businessman Reghis Romero and Michael Romero, chairman and chief executive, respectively, of Harbour Centre Port Terminal Inc. (HCPTI), which got the contract, were also charged as co-respondents.

The Ombudsman said the SBMA officials “displayed manifest partiality and evident bad faith in the performance of their functions,” and said the agency resorted to procedural shortcuts in awarding the contract to HCPTI.

The anti-graft body also noted the SBMA had lowered the cost of the contract to only P763 million to allow HCPTI to post a lower bid security of P15.26 million. However, the JVA originally cost P5.537 billion, which should have required the HCPTI to post a bid security of P100 million.

Garcia said the SBMA, under his helm, did not implement the JVA with HCPTI.

He said that upon taking over as chairman in 2010, he asked around and became wary of the contract upon learning that the National Economic and Development Authority had withdrawn from the project.

“So we didn’t take action [on the JVA]. We simply followed the court order declaring the JVA null and void,” Garcia said.

Pending the resolution of the case against the HCPTI contract, the status quo remains and the SBMA continues to operate all the 14 wharves and piers in the Freeport, Garcia said.

The newly appointed OICs will be serving in a temporary capacity, and without additional pay, until the graft case has been finally resolved, he said. (Henry Empeño, BusinessMirror)

http://businessmirror.com.ph/index.php/en/news/top-news/31631-sbma-revamped-after-key-officials-ouster

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Romeros deny any illegality in Subic deal

The camp of the Romeros of the Harbour Centre Port Terminal Inc. (HCPTI) yesterday denied they had committed any illegality in its deal to develop Subic Bay, claiming they were only victims of black propaganda by losing bidders who have been responsible for transforming the once glorious port into its current sordid state.

In a statement, lawyer Carlo Solis, head of the Administration Division of HCPTI said that their company had envisioned Subic to be a world-class seaport capable of handling large volume of cargoes and ships, not like its current state where neglect and disrepair are evident.

“That was what HCPTI had set out to do but for which we had found ourselves unjustly and unduly hailed to court,” Solis said.

Solis lamented it has been disheartening that HCPTI ended up being at the receiving end of baseless accusations for trying to develop Subic into a fully functioning and modern hub for shipping operations.

“All records would show that the HCPTI proposal to modernize Subic ports underwent rigorous government scrutiny and bidding process pursuant to the guidelines and procedures for entering into JVAs between government and private entities issued by the Neda. HCPTI not only followed all the rules and complied with the strict government standards and regulations, records will show that it also complied with additional requirements imposed by the SBMA Board,” Solis stressed.

Last week, Reghis Romero II and son, Michael Romero, chairman and chief executive officer, respectively, of HCPTI along with a list of former officials of the Subic Bay Metropolitan Authority (SBMA) were ordered indicted by the Ombudsman regarding a joint venture agreement between SBMA and Harbour Centre to develop and maintain ports and wharves at Subic Bay.

Ombudsman Conchita Carpio-Morales ordered the individuals charged for violation of the Anti-Graft and Corrupt Practices Act or Republic Act 3019.

Based on a resolution of the Ombudsman approved April 7, Morales recommended the prosecution of the Romeros along with former SBMA chairman Feliciano Salonga, former administrator and CEO Armand Arreza, senior deputy administrator Ramon Agregado, former Senior Deputy Administrator Ferdinand Hernandez, former Deputy Administrator Ma. Cristina Millan, deputy administrator Marcelino Sanqui, former board member Edralino Cajudo, former board member Antonio Rex Chan, former board members Ricardo Coscolluela, Angelita DJ Cruz, Teodoro del Rosario, Jorge Estanislao, Ma. Angela Garcia, James Lorenzana, Ma. Victoria Pineda, Stefani Saño, Jennifer Khonghun-Ting and Eddie Tamondong.

The 32-page joint resolution stated that the SBMA officials “displayed manifest partiality and evident bad faith in the performance of their functions.”

It cited the guidelines issued by the National Economic Development Authority (Neda) that a joint venture agreement (JVA) shall only be executed after the conduct of the competitive challenge (bidding) where a private sector participant has been declared winner and issued a notice of award. (Charlie V. Manalo, The Daily Tribune)

http://www.tribune.net.ph/nation/romeros-deny-any-illegality-in-subic-deal

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Criminal raps ordered vs HCPTI’s Romeros

Ombudsman Conchita Carpio-Morales on Monday ordered the filing of criminal charges against Harbour Centre Port Terminal Inc. (HCPTI) Chairman Reghis Romero II and Chief Executive Officer Michael Romero.

In a resolution approved on April 7, Morales said that besides Reghis and Michael, she ordered the filing of information against 18 officials of the Subic Bay Metropolitan Authority (SBMA).

According to Morales, on February 24, 2010, the SBMA entered into joint-venture agreement (JVA) with HCPTI for the development, operation and management of the Naval Supply Depot and the ports in Boton, Alava, Rivera and Bravo.

“The Terms of Reference granted it concession as exclusive port operator of the five ports and exclusive cargo handling for foreign and domestic break-bulk and bulk cargoes for the entire zone. In exchange, the SBMA stood to receive a fixed and guaranteed share of $32,000,000 for the 25-year agreement, as well as a variable revenue share,” she said.

The case stemmed from separate complaints filed by port operators Amerasia International Terminal Services Inc. (AITSI) and Subic Seaport Terminal Inc. (SSTI), which contested the award to HCPTI.

The Ombudsman determined that as officers and beneficial owners, Reghis and Michael Romero were at the receiving end of the unwarranted benefits as they failed to show that the company was legally entitled to its grant.

“Respondents’ above-described acts readily show that they acted in conspiracy, that is, they came to an agreement concerning the commission of a felony and decided to commit it,” the resolution said.

However, Reghis and Michael Romero’s other criminal charges for violation of Section 3 (g) and (j) of Republic Act (RA) 3019, and Article 186 (Monopolies and Combinations in Restraint of Trade) of the Revised Penal Code were dismissed for lack of merit.

For the SBMA, Morales ordered the filing of an information for violation of Section 3(e) of RA 3019 against former SBMA Chairman Feliciano Salonga, former Administrator and Chief Executive Officer Armand Arreza, Senior Deputy Administrator Ramon Agregado, former Senior Deputy Administrator Ferdinand Hernandez, former Deputy Administrator Ma. Cristina Millan, Deputy Administrator Marcelino Sanqui, former Board Members Edralino Cajudo, Member Antonio Rex Chan, Ricardo Coscolluela, Angelita DJ Cruz and Teodoro del Rosario.

Also included as respondents are former Board Members Jorge Estanislao, Ma. Angela Garcia, James Lorenzana, Ma. Victoria Pineda, Stefani Saño, Jennifer Khonghun-Ting and Eddie Tamondong.

Morales said the SBMA officials “displayed manifest partiality and evident bad faith in the performance of their functions.”

The resolution cited the guidelines issued by the National Economic Development Authority (Neda) that a JVA shall only be executed after the conduct of the competitive challenge (bidding) where a private-sector participant has been declared winner and issued a Notice of Award. It also noted that the SBMA resorted to procedural shortcuts and undertook material deviations, including changes in the eligibility requirements.

Morales also said she found that the SBMA pegged the project cost at only P763 million to allow HCPTI to post a lower bid security of P15.26 million, even if the original cost of the JVA was set at P5.537 billion, which should have required a bid security of P100 million.

“By changing the project cost after the publication of the Invitation to Submit Comparative Proposals and imposing additional eligibility requirements, it appears that respondents manipulated the process by enabling HCPTI to post a significantly lower bid security and, at the same time, discouraging prospective JV partners from participating in the competitive challenge by imposing conditions for participation based on the higher project cost,” the resolution explained.

Meanwhile, in a 20-page decision on the administrative aspect of the AITSI complaint, Morales said she found the commission of grave misconduct and ordered the dismissal from the service of Agregado, Sanqui and Salonga with the accessory penalties of absolute disqualification from holding any public office, forfeiture of retirement benefits, cancellation of civil service eligibility, and bar from taking any civil service examination.

The same principal penalty would have been imposed on Arreza, Millan, Cajudo, Coscolluela, Cruz, del Rosario, Estanislao, Lorenzana, Pineda, Saño, Ting and Tamondong had they not been separated from the service during the pendency of the case. They were, however, each ordered to pay a fine equivalent to their salary for one year deductible from their retirement benefits, accrued leave credits and other receivables, aside from facing the same accessory penalties.

The Ombudsman, however, said the administrative case against Hernandez, Chan and Garcia was dismissed in view of their separation from the service prior to the filing of the case.

The second administrative case for violation of Section 5(a) of RA 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees) was dismissed for lack of merit, in a separate seven-page decision on the administrative aspect of the SSTI complaint. (Jovee Marie N. dela Cruz, Business Mirror)

http://www.businessmirror.com.ph/index.php/en/news/top-news/30636-criminal-raps-ordered-vs-hcpti-s-romeros

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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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