SMC allots P2 billion for Manila North Harbor modernization

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. (SMC) has committed at least P2 billion to finance the first year requirements for the modernization of the Manila North Harbor after the Philippine Ports Authority (PPA) approved the sale by Manila North Harbor Port Inc. (MNHPI) of a 35-percent stake to SMC.

The approval came on the heels of a go-signal given by the port authority to Romero-led Harbour Centre Port Terminal Inc. (HCPTI), which owns 65 percent of MNHPI, to buy out the 35- percent share of Metro Pacific Investment Corp. (MPIC).

As this developed, MNHPI is in talks with a Singapore-based firm to undertake the engineering design and planning for North Harbor and convert the latter into a world-class port.

MNHPI is the joint venture company created by HCPTI and MPIC that will undertake the 25-year, P14.5-billion modernization and operation of North Harbor.

A refusal by HCPTI to allow MPIC to acquire a majority stake in MNHPI led to the Romero group to offer to buy out MPIC’s 35-percent stake and sell it to SMC.

In a letter of support submitted to the Philippine Ports Authority (PPA), SMC said it is providing a security bond from Bank of Commerce, a company that it partly owns, as well as credit line totaling around P2 billion to prove its commitment to the project.

PPA general manager Oscar Sevilla said in an interview that SMC has committed to provide the financial muscle for the North Harbor modernization project. “The P2 billion is just the requirement for the first year of the contract. This is on top of the P350-million purchase price for the 35-percent stake in MNHPI,” he revealed.

SMC president Ramon Ang has said that he is giving full support to the North Harbor project. “Whatever amount is involved I am willing to give it,” Sevilla quoted Ang as saying.

It was learned that Ang, in a meeting with PPA officials, also said he was not concerned about the opposition being raised by some stakeholders of North Harbor, particularly a number of shipping operators, to the port’s privatization. “The important thing is that North Harbor be modernized,” Ang was quoted as saying.

PPA officials also revealed that SMC will not engage itself in port operation, but will allow its partner HCPTI to take care of that aspect.