DTI head urges Shimao Group to seek RP partner

The Shimao Group, the Chinese investor who vowed to invest $4 billion in the Philippines, should look for a local partner to avoid the trouble of going through a public bidding, Trade and Industry (DTI) Secretary Peter B. Favila said.

In an interview, Favila said the Shimao Group plans to build high-end hotels and residential properties in Bases Conversion Development Authority (BCDA) properties located in Fort Bonifacio including the 35.5-hectare Jusmag property by this month when President Arroyo visits China.

However, Favila said it is not possible to fast-track the investment if the Shimao Group would like to build on BCDA properties. Being a government property, the long-term lease would have to pass through bidding.

Favila said it would be better for the group which is chaired by China’s second richest man Xu Rongmao to enter into a joint venture project with either the Ayalas, Lucio Tan or Metropolitan Bank and Trust Co. (Metrobank).

He said if Shimao decides to develop a private company, then there is no need to go through the entire bidding process. Only government owned properties are required by law to undergo public bidding.

Favila met with representatives of the Shimao Group to discuss how the Chinese-based conglomerate can hasten their investment in the country.

Last month, the Shimao Group and BCDA entered into a memorandum of understanding wherein the BCDA will be a  lessor. According to Favila, the government is willing to provide the Shimao Group the longest term possible. This means that the lease would run for 50 years and renewable for another 25 years.

When he met with the President, Xu said there is a huge market in the Philippines in terms of hotels. In the Association of Southeast Asian Nations where Chinese tourist arrivals registered at around 10 million, the Philippines hosted only 300,000 of the figure. Favila said this implies that there is still a huge potential to develop the market

The Shimao Group is one of the biggest real estate developers in China, whose stock is listed in Hong Kong.

Favila noted that the Shimao Group owns three listed companies namely the Shimao Property  Hongkong, Shimao Stock, Shanghai and the Shimao International Off-shore in Hong Kong.

The firm is involved in the development of high-end residiental and commercial properties and five-star hotels.

The Shimao Group owns hotels in Australia, Russia, China and other countries in Southeast Asia.