SC confirms award of Subic freeport contract to ICTSI

International Container Terminal Services Inc. (ICTSI) can now take over and start the development of the Subic Bay Freeport following the decision of the Supreme Court to junk the protest filed by the original winning bidder, Hutchison Ports Philippines Ltd. (HPPL).

The decision of the High Tribunal concluded a controversy that lasted two years following the public bidding for the right to develop and operate a modern marine container terminal within the freeport.

Despite repeatedly winning the public bid, HPPL lost its case to ICTSI on a technicality after the court found that it has failed to secure a business license, depriving it of the legal personality to contest government’s decision to ultimately award the contract to ICTSI.

In its 17-page decision dated Aug. 31, 2000 the Supreme Court ruled against HPPL and dismissed its petition for lack of merit, saying the company did not even have the legal personality to contest the award of the contract to ICTSI. HPPL is a subsidiary of Hong Kong’s Hutchison Whampoa Group which was invited by the Subic Bay Metropolitan Authority (SBMA) to make a bid for the 25-year cargo handling contract for the Subic Bay Freeport.

The development contract was bid out by the SBMA in 1996. Three groups were pre-qualified to bid, namely ICTSI, HPPL and Royal Ports Services Inc. (RPSI).

SBMA had declared HPPL as the winning bidder but ICTSI appealed the decision before then President Fidel V. Ramos who threw out the SBMA decision and ordered a new bidding.

The Supreme Court decision indicated that the SBMA under then chairman Richard Gordon, complied with the Ramos order and subsequently re-evaluated the bids made by ICTSI, HPPL and RPSI.

HPPL was declared the winning bidder for the second time but Ramos ordered a second rebidding, ordering the SBMA to "refrain from signing the concession contract with HPPL."

In the third bidding, only ICTSI and RPSI were qualified to bid, leaving HPPL out of the race. This prompted HPPL to file a case before the regional trial court of Olongapo City after the SBMA failed to draw up the concession agreement.

The court issued a temporary restraining order against the SBMA, preventing the agency from negotiating with any other party until the Philippine courts have decided whether the President had the mandate to set aside the award made by the SBMA. In its decision, the High Tribunal ruled that the SBMA was "under the direct control of the Office of the President especially where it concerned contracts or projects entailing substantial amount of money."