Daewoo to set up $20-M CNG bus assembly plant

Korean firm Daewoo Industries plans to set up a $20-million compressed natural gas (CNG)-fed vehicle assembly facility in the Philippines, Energy Secretary Vincent S. Perez disclosed yesterday.

Perez said in a press briefing the Korean automotive firm has expressed interest to put up a bus assembly plant in one of the country’s export processing zones. Daewoo is among the companies that were wooed by President Arroyo to invest in the Philippines during her recent investment mission to South Korea and Japan.

"Daewoo said they can be a potential supplier of CNG buses in Manila," Perez said, noting that this development will help boost the country’s downstream natural gas industry, particularly in the transport sector.

The Department of Energy (DOE) is targeting to have at least 100 CNG-fed buses running in the country’s major thoroughfares within this year.

In a related development, the DOE and the Development Bank of the Philippines (DBP) have signed a memorandum of agreement (MOA) to provide an P87-million loan to RRCG Bus Co. to purchase at least 20 CNG-run buses.

"This loan is first-of-its-kind to be given to a bus operator. Each bus will amount to about P4.5 million," Energy Undersecretary J.V. Emmanuel de Dios said, noting that the financing window offers a very low interest.

De Dios said that aside from an attractive financing package, operators who avail themselves of such a loan will also be given preferential treatment in the application of franchise, will pay only one percent import duty, and enjoy other privileges.

He said Shell Philippines Exploration B.V. (Spex) and Pilipinas Shell Petroleum Corp. (Shell) will also help in this endeavor.