BIZ BUZZ: All eyes on Subic authorities
Stakeholders in the Subic freeport zone are eagerly awaiting the next move of the agency in charge of the former US Navy base with regard to a port operations deal entered into over a decade ago that is now once more in the spotlight.
We are, of course, talking about the 2010 joint venture agreement (JVA) between the Subic Bay Metropolitan Authority (SBMA) and Harbour Centre Port Terminal Inc. of businessman Reghis Romero II for the latter to become, among other provisions, the exclusive cargo handler of all goods inside the freeport.
It also calls for Harbour Centre to undertake the development, management and operation of the piers and wharves inside the facility.
The deal was junked by the National Economic and Development Authority (Neda) in 2011, but was resurrected two years ago with no less than the Supreme Court ruling in favor of the deal and ordering SBMA to honor its agreement with Harbour Centre.
In invalidating the deal, Neda said it ran counter to the principles of transparent governance that should apply to government contracts.
For example, the deal was approved just three months after an unsolicited bid was given by the private company to undertake the project. The evaluation should have taken longer, and there should have been a competitive challenge to the proposal (for which there was none, according to the deal’s critics).
Second, the deal was also sealed at a time when there was supposed to be no awarding of government deals, because of the contracting ban in the months prior to the 2010 elections, the critics said. But with the Supreme Court now having ordered the parties concerned to implement the deal, locators in Subic—which stand to be adversely affected by the deal—are waiting with bated breath as to what SBMA would do.
Biz Buzz hears that the business viability of at least 12 locators (some which have been operating in Subic since 1996) will be affected by this ruling. These companies wrote the SBMA last June and pleaded with SBMA administrator Jonathan Tan to articulate where Subic stands in this controversy, and if it leans toward honoring the JVA and how exactly this will be implemented.
They appealed for the protection of their investments and for business continuity, saying that they have collectively invested more than P1 billion and employ more than 1,500 workers.
Three months on, they are still waiting for answers to their questions.
Of course, the most contentious aspect of this joint venture deal is that, according to its critics, it contains an exclusivity provision that creates a monopoly that will restrain trade and lead to possible loss of businesses and livelihood of their employees.
It’s no surprise then that an old rivalry between two giants in the Philippine ports industry is reemerging in this debate. But who will prevail? Abangan!
— Daxim L. Lucas
Century Pacific index debut?
It appears that investors have been picking up the shares of Century Pacific Food Inc., the maker of Century Tuna and Argentina corned beef, amid the speculation over its entry into the Philippine Stock Exchange index. On Wednesday, its shares climbed by 4.83 percent, or P1.40, to close at P30.40. This is already close to its one-year high of P30.60.
But who will have to leave the 30-member index to make way for the food manufacturer?
COL Financial Group Inc. chief equity strategist April Lynn Lee-Tan said it could be Aboitiz Power Corp.
“[There] is speculation that CNPH will replace AP if the power co will be removed from the index, explaining its strong performance lately,” she said in a post on X (formerly Twitter).
Investors should get greater clarity in a few weeks.