MANILA, Philippines - The Philippine Ports Authority (PPA) has scheduled a meeting next week with top officials of Metro Pacific Investments Corp. (MPIC) and the Romero-led Harbour Centre Port Terminal Inc. (HCPTI) to settle the ownership dispute in Manila North Harbor Port Inc. (MNHPI) which was granted a 25-year contract to operate and rehabilitate North Harbor.
In an interview, PPA general manager Oscar Sevilla also said any change in equity of any of the partners in MNHPI, a joint venture company between MPIC and HCPTI, requires approval of the ports regulator.
“So, if MPIC decides to accept Harbour Centre’s offer to buy it out, then that will have to be approved by PPA,” Sevilla emphasized.
HCPTI earlier rejected MPIC’s proposal that it be allowed to increase its stake in MNHPI from 35 percent to at least 51 percent. Instead, the port operator, which owns 65 percent of the joint venture company, offered to buy out MPIC’s stake for P350 million.
When asked why they have not accepted HCPTI’s offer to buy them out, MPIC chairman Manuel Pangilinan, who also chairs MNHPI, told the STAR that “neither party can sell their shares without PPA approval.”
Sevilla explained that the contract between PPA and MNHPI for the operation, management and rehabilitation of North Harbor does not require that there must be at least two parties in MNHPI as previously reported.
“Right now, the qualification requirement belongs to Harbour Centre being a company into port operations while the financial muscle belongs to MPIC. But if Harbour Centre can prove to us that it can perform the contract alone and provide the funds needed, then there is no need for HCPTI to partner with another company. We can allow it to operate North Harbor alone,” he said.
For starters, Sevilla emphasized that aside from the P350 million that will be paid by HCPTI to MPIC representing the latter’s 35 percent equity in MNHPI, Harbour Centre will also have to prove to PPA that it has at least P2.5 billion to finance the first year requirement of the project. This includes providing two short cranes and other equipment, as well as putting up immediately one terminal building.
But aside from that, he said HCPTI will also have to show PPA that it can finance the entire P14.5-billion cost of the North Harbor project. “They will have to prove to us that they can undertake the project alone until its completion and show to us where they will be getting the funds,” Sevilla added.
Sources privy to the negotiations revealed that the Romero group has already formalized its offer to buy out MPIC’s 35 percent stake in MNHPI but according to Sevilla, they have not been informed about it.
MNHPI president Michael Romero earlier said giving ups majority control of MNHPI will be against their commitment to modernize the dilapidated North Harbor port which is the principal concern of Harbour Centre to the public.
Romero emphasized that their family has been in the ports operation business for more than a decade.
For his part, Pangilinan has said that they are considering only two options: either they acquire control of MNHPI or just step out of the picture.
Meanwhile, MPIC president Jose Ma. Lim was quoted as saying that both parties are working towards the resolution of the issue at hand and are hoping an agreement will be reached in the next few weeks.
Lim said MPIC is waiting for the PPA’s action on the matter, pointing out that any change in ownership of MNHPI would require the government’s approval. “We hope to set a meeting with them (PPA) soon,” he said.
The creation of a joint venture company was one of the requirements set by the PPA as part of the Manila North Harbor contract.
Lim reiterated the group’s position that it would withdraw from the joint venture if it fails to secure majority control of MNHPI, which bagged the right to operate and manage the Manila North Harbor for 25 years with its bid of P14.5 billion.
“Only two options are viable for MPIC: secure majority ownership or failing this, full divestment. Majority control would give us confidence in committing the necessary capital to secure the equipment that will resolve the complaints of the shipping companies and fund the severance pay that is the source of current tensions with labor,” he said.
Lim said the group will seek the return of all invested capital and the release of all guarantees provided by MPIC for the joint venture. “Securing control of MHNPI gives us confidence to ensure successful implementation and funding of the port’s modernization program,” he said.
Manila North Harbor handles more than 85 percent of the domestic containerized and breakbulk cargo. North Harbor was officially turned over to MNHPI last April 12.
The first phase of the Manila North Harbor modernization program involves the redesign of the 10-pier port into a three- terminal port with much wider beds that would, all together, enable the port to improve its rate of handling containers, from the five containers per hour to 28 containers per hour. From 1.5 million TEUs capacity, MNHPI will increase the capacity to five million containers a year. “This reflects more than 500 percent increase in productivity for the port, and renders substantial savings for shipping companies,” Romero said.
The 25-year North Harbor modernization program includes pier rehabilitation, dredging of port waterways, computerization, introduction of new cargo handling equipment and construction of a modern passenger terminal.
Terminal 1 and 2 will be the container terminals while Terminal 3 will be exclusively for general cargo. A separate modern passenger terminal will be built, rivaling those of other countries, to cater to domestic travelers.