Boosting the local port sector

It will be a bullish 2011 when it comes to port development. San Miguel Corp. (SMC) and its subsidiary Petron Corp., appear to be leading the pack when both announced a partnership with the country’s most dynamic port operator Harbour Centre Port Terminal Inc. (HCPTI) for Manila North Harbour Port Inc. (MNHPI).

The New Year definitely started with a bang when Petron Corp. announced it has purchased 35 percent of the outstanding and issued shares of MNHPI.

MNHPI has been given the P14.5 billion 25-year contract to modernize and operate the North Harbor in Manila.

SMC-Petron is shelling out around P350 million for the 35 percent interest in MNHPI but SMC is expected to infuse some P20 billion more into the North Harbor modernization, primarily for the setting up of “San Miguel City” at the soon to be expanded port facility. “San Miguel City” will serve as a fuel depot for Petron as well as a grains terminal and logistics area for San Miguel products.

With the agreement, MNHPI now becomes a joint venture between HCPTI, led by its president and CEO Michael Romero, which will own 65 percent, and Petron which will own the remaining 35 percent.

MNHPI was originally a joint venture between Metro Pacific Investments Corp. (MPIC) and HCPTI until MPIC pulled out because of controlling stake issues.

Of the 53-hectare North Harbor area, around three hectares will initially be utilized for the San Miguel complex but will later be expanded as the need arises.

Indeed the entry of Petron into North Harbor is a victory of some sorts for group of Reghis Romero II and his son, Michael. Since last year, the Romero family has been the target of attacks aimed at tainting their credibility via the Smokey Mountain development controversy. RII Builders, owned by the elder Romero, was the developer of the Smokey Mountain Rehabilitation and Development Project (SMDRP).

The undisclosed group has come out with “malicious” newspaper advertisements and articles which directly accuse Reghis Romero of being the brains behind the alleged onerous and highly disadvantageous SMDRP. However, the accusation went straight to the wall as the legality and validity of the SMDRP has long been upheld by the Supreme Court in a unanimous decision in 2007.

But observers noted that the sustained but lackadaisical attacks against the Romeros over the years have been ineffective. The credibility of the Romero family remained intact and its companies even soared to new heights as a diversifying conglomerate like SMC has put its trust into the modernization project at the North Harbor.

Incidentally, HCPTI was formed as an offshoot of the SMDRP. Definitely, a leading company like the SMC would not take part in a project that it does not believe in.

At most, the offensive has boomeranged to the parties that have long been in legal battle with RII Builders with respect to the liquidation of the asset pool of the SMDRP. It seems some forces are out to resurrect the long-settled Smokey Mountain issue because they have personal interests in making sure the rights of the parties in the agreement will not be served.

But residents of Manila, particularly in Tondo, couldn’t care less about the attacks against the Romeros with the impending modernization of the North Harbor. Michael Romero, chairman of MNHPI, has revealed that his firm is scheduled to submit to the Philippine Ports Authority the conceptual design for the modernization of the North Harbor.

MNHPI, he said, has consulted all stakeholders in order to incorporate all their concerns and needs into the plan. He said the plan will address the needs of shipping lines, port users and the general public. He envisions North Harbor to be the country’s world-class port that will revitalize not only Manila but also the whole economy.

Manila residents are immediate beneficiaries of the port modernization as some 5,000 jobs will be created once construction and rehabilitation are implemented and in full swing. Job opportunities will also be created for residents within the area once the modern port is operational because it will revitalize port operations.

Romero said they are redesigning the 10-pier port into a three-terminal port with much wider beds that will increase handling capacity to 28 containers per hour from five. This will enable North Harbor to service big vessels to make it conform with international standards and specifications.

MNHPI will also modernize the passenger terminal to make it world-class. They will also build a terminal for roll-on, roll-off (RoRo) vessels.

Romero said the project is long overdue as North Harbor has fallen into disrepair over the years. To solve this problem, they have shortened their projected construction period of about six to eight years to just about five years.

He added that the new and modern port would improve the image of Manila and the Philippines. At the same time, the project would raise more than P6.8 billion in revenues for the Philippine Ports Authority (PPA) over the next 25 years and reduce port rates at an average of 10-15 percent.

Without a doubt, there is excitement in the port industry with the impending modernization of the North Harbor. It has become more exciting with the entry of giant SMC into the picture.

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