Shipping lines back MPIC bid to gain control of North Harbor

MANILA, Philippines - Fearing the possibility of a looming monopoly by the Romero family over ports, the Philippine Lines Shipping Association, Inc. (PLSA), which comprises eight of the biggest users of the Manila North Harbor, has thrown its support behind Metro Pacific Investments Corp., which is seeking control of the country’s busiest and premier domestic port.

Last week, MPIC chairman Manuel V. Pangilinan said the company was contemplating on withdrawing from its joint venture with the Romero-led Harbour Centre Port Terminal Inc. (HCPTI) if it fails to get majority control of the Manila North Harbour Port Inc. (MNHPI).

MNHPI president Michael Romero said his group is not ceding control of the joint venture firm to MPIC, pointing out that such a move would go against its commitment to modernize the aging North Harbor. The group is in the process of consolidating its port operations business under a new corporate entity to be called Harbour Centre Port Holdings Inc. in preparation for its planned initial public offering that could fetch P1.5 billion to P3 billion.

The creation of a joint venture company between MPIC and HCPTI was one of the requirements set by the Philippine Ports Authority (PPA) as part of the Manila North Harbor contract.

In a letter to the PPA, the PLSA, which contributes 70 percent of the domestic container market and 95-percent share of passenger volume at the harbor, said it believes that allowing Pangilinan’s group to have a majority stake in MNHPI will give MPIC the ability to reorganize MNHPI and have a professional management team run the port.

Currently, MNHPI is 65 percent owned by the family of businessman Regis Romero’s HCPTI with MPIC holding the balance of 35 percent. The consortium bagged in October the right to operate and manage the Manila North Harbor for 25 years with its bid of P14.5 billion.

The turnover, originally slated for January, had been postponed several times due to strong opposition from ship liners, cargo handlers and labor groups.

The PLSA expressed concern over the prospect of the looming monopoly by the Romero family of three of the country’s ports – the North Harbor, the neighboring Harbor Center Port and the Subic Port.

“Allowing a true monopoly will, without doubt, be inimical to the public’s interest in the long-term,” the PLSA said, pointing out that the Romero-led group has “already displayed monopolistic tendencies during these short few months in control of operations, in the same way it is running Harbor Center.”

“It (referring to the Romero family) has not brought in the promised equipment to bring services to the level they were before the takeover and has not acted in a professional manner to its customers,” PLSA said.

The PLSA stressed that despite its initial reservation to PPA’s one- bidder award to the joint venture, it “found comfort in the fact that MPIC, a company with track record in world class management standards, would be a financial and important shareholder that would ensure that the port would be run professionally, the way it runs its other businesses.”

“We thus urge the PPA to intervene in the brewing rift between the two partners of MHNPI as our operations are already badly affected by the inefficiency and lack of equipment of MNHPI and we are hoping it will not get any worse,” the PLSA said.

Changes in the ownership of MNHPI would require approval of the PPA which awarded the contract.

Romero earlier ruled out the possibility of giving up control of MNHPI even as it was open to exploring available options to resolve the issue.

Manila North Harbor, handles more than 85 percent of the domestic containerized and breakbulk cargo.

The PLSA is composed of Negros Navigation Company, Phil. Span Asia Corp., Gothong Southern Shipping Lines, Inc., Lorenzo Shipping Corp., Moreta Shipping Lines, Inc., NMC Container Lines, Inc., Oceanic Container Lines, Inc. and Solid Shipping Lines, Inc.