Hanjin sets add’l conditions for its $1-B project in Subic

Korean-firm Hanjin Heavy Industries & Construction Co. Ltd. is setting two additional conditions for its $1-billion planned investment in the Subic Freeport.

Hanjin’s planned $1-billion investment in Subic is expected to be formalized next month.

As a "precedent" to its investment, Hanjin is asking the Board of Investments (BOI) to give it an eight year income tax holiday for each phase of its project at the Subic Free-port’s Redondo beach area.

Another condition it is seeking, this time from the Department of Public Works and Highways (DPWH), is provision of an access road to the Redondo beach area as a supporting part of the Subic Bay Metropolitan Authority (SBMA) Redondo area master development plan.

The Department of Trade and Industry and BOI have been talking with Hanjin since April this year during the term of former Trade and Industry Secretary Juan B. Santos.

Hanjin plans to produce ship parts initially in Subic and eventually go into shipbuilding in the former US naval facility.

A Memorandum of Understanding (MOU) has already been executed between Hanjin and SBMA regarding the project and the contract of lease with the SBMA is now in the process of being negotiated and finalized.

However, Hanjin is now asking the DTI/BOI a written assurance for its request for an eight year ITH and for the DPWH to construct an access road to the Redondo area.

Access to the Redondo area is currently compromised by squatter families who will have to be relocated. President Arroyo, who had witnessed the signing of the MOU together with then Trade Secretary Santos, had reportedly assured Hanjin of her support for the project.

Earlier, SBMA adminitrator Armand Arreza had disclosed a possible $1-billion investment by a Korean shipbuilding firm whom he did not name.

The Korean investor, Arreza said, was eyeing a 269-hectare area in the Freeport where it eventually hopes to engage in the construction of ships with a cargo capacity for 8,000 TEUs.

However, the projected start of the shipbuilding activities is still in the first quarter of 2008.