P-Noy's SONA and Subic

The honeymoon period between media and President Noynoy Aquino is still on, so we will not join the crew that’s bashing the recent State of the Nation Address (SONA). True, some of the supposed exposes in the speech could stand some data verification. But we should not lose sight of the positive aspects of the SONA.

An outstanding feature is the planned expanded collaboration with private sector investors. This is going to be crucial, given the President’s revelation that the coffers of the government may not have enough to fund the developmental programs of his administration.

Aquino clearly illustrated how he wants private sector to come in and help. He related the offer by some parties to convert the Navy facility in Roxas Boulevard into a commercial cum business hub without the government spending a single centavo.

The fact is this is nothing new. What the President explained in the SONA has been done in the past under the so-called build-operate-transfer (BOT) scheme and the unsolicited proposal process combined with the Swiss Challenge method. Many major infrastructure projects have been successfully built under these.

The President’s SONA will probably serve notice to the nemeses of the joint venture proposal now pending with the Subic Bay Metropolitan Authority (SBMA) for the cargo-handling operation for the bulk and break-bulk cargo terminals of Subic .

The bad news for the nemeses of the planned joint venture proposed by the Harbour Centre Port Terminal, Inc. (HCPTI) is that the President appears convinced that this form of collaboration with the private sector is the way to go.

It will be recalled that HCPTI submitted an unsolicited proposal about a year ago for the said operation. The proposal has been languishing with the SBMA because of the Swiss Challenge requirement which allow other interested parties to submit a counter-offer. No such counter-proposal was ever submitted, but the parties which did not like the proposal opted instead to demolish it via a well-funded media blitz.

What the media blitz did not conceal, however, are the obvious advantages that the HCPTI joint venture offers. Among them, a minimum guaranteed revenue of some $32 million over a 25-year period, increasing revenue shares, and a commitment to invest some P6 billion for the further expansion and development of Subic ’s bulk cargo terminal.

This is exactly what Aquino wants – the private sector pouring in the money to make the country more competitive in the international arena.

The SBMA board should now take the cue from the President, who said in very clear terms that he wants private sector money funding public sector development. There is no more reason for the SBMA board to dilly-dally on the joint venture proposal.

The biggest argument against the joint venture has already been demolished. It has been proven that the “midnight deal” tag is not true. There was no midnight deal; and the SBMA has waited long enough for a superior offer to be put in the table.

There being none, the SBMA should now allow the joint venture to serve as a doable and concrete template for the private-public sector collaboration under the Aquino administration.

The enemies of the joint venture proposal should, at this point, challenge the joint venture in court once the SBMA decides that the HCPTI proposal is the best way to go. It looks like no amount of vilification in media could hide the obvious advantages of the HCPTI offer.

The more peaceful way to go, however, is for the enemies of the joint venture to come up with a superior offer. Like, maybe, triple the P6 billion commitment of HCPTI for port development, or maybe surpassing the minimum guaranteed revenue of $32 million over a period of five years.

These features of the proposal have made the current arrangements at the Subic port look extremely pathetic: no minimum guaranteed revenues and no commitment to fund port development while the business operators rake in the money from this prime facility.

Aquino has inferred that these are no longer acceptable. Private sector should participate more aggressively and actively in the country’s development. And at this point, nothing appears to be more aggressive than what is in the table for SBMA.

For comments, e-mail at [email protected]