Ship-leasing, lease-to-own systems offered to boost RP RoRo service

CEBU, Philippines – The DBP Maritime Leasing Corporation (DMLC) is going to intensifying its presence in the Visayas and Mindanao, to encourage shipping operators to avail of its ship-leasing and lease-to-own facility to boost roll-on-roll-off (RoRo) transport service in Southern Philippines.

DMLC vice president for shipping operations Ranilo Hermes A. Bacolod said that shipping operators in this side of the country should know that there is a facility being offered by the state-owned institution and that source to acquire vessels for expansion is now easier.

DMLC is the only government financial institution solely dedicated to the maritime industry.

It offers a lease program as an alternative financing scheme to acquire RO-RO vessels. Significantly, shippers who want to operate RO-ROs prefer to lease the vessels because the arrangement requires no major capital investment and offers real cash flow advantages.

In 2009, the biggest chunk of DBP's P167.01 billion total loan portfolio was appropriated to the Sustainable Logistics Development Program (SLDP), which falls directly under the Strong Republic Nautical Highway (SRNH) initiative.

About P13.42 billion of the over-all DBP's P167.01 billion total loan portfolio last year, funded projects that linked up the country's over 7,000 islands via sea lanes as the major arteries of trade, bringing down the cost of goods through a modern storage, handling and transport system.

In an interview with Bacolod over the weekend, he said that there is a need for shipping operators in Visayas, especially Cebu which is the transport hub in the Southern Philippines to be aware of this facility, and that they will not depend solely on applying the credit facilities offered by its mother company-the DBP.

Recently, DMLC awarded a P137 million cost of vessel to a Cebuano shipping operator, the VG Shipping Lines Company, to operate a 210-passenger RoRo vessel that will connect the islands of Cebu, Bohol and in Mindanao.

Bacolod hopes that more Cebu-based shipping companies, and even those that are in other provinces in Visayas and Mindanao, will be able to avail of this facility.

According to Bacolod, VG Shipping Lines, is the first Visayas-based company to avail of this facility. VG Shipping Lines was able to close a contract for the boat's lease-to-operate agreement, with option to convert it to lease-to-own contract, after three years.

"We need to strengthen our information dissemination on this kind of facility in this part of the country," Bacolod said.

Bacolod hopes that with this facility, more shipping operators will be encouraged to ply missionary routes in different islands in the Visayas and Mindanao, boosting the RoRo program of the government, and providing a "mobile bridge" facility connecting the islands. (FREEMAN)