Joint venture, legislation eyed for ship repair facility in Subic

SAN FERNANDO CITY, Pampanga — President Arroyo is supporting a proposal to allow an American firm to largely or even fully own and operate a ship repair and maintenance facility at the Subic Freeport either through legislation or joint venture agreement.

Angelito Sarmiento, deputy chief of the Cabinet office for Central Luzon headed by Executive Secretary Alberto Romulo, said in a press briefing here that Mrs. Arroyo has ordered the drafting of a House bill that would amend the law limiting foreign investments in public utilities to only 40 percent.

The move is apparently to accommodate a proposal by the US firm Halliburton to establish a ship repair and maintenance facility at the former US Subic naval base.

The President bared this during her meeting with the Cabinet cluster for Central Luzon and the Regional Development Council (RDC) at Max’s restaurant here last Saturday, Sarmiento said.

"One option is for the project to be undertaken as a joint venture agreement under the build-lease-transfer scheme, but this (has) yet (to be) explored. The other is congressional amendment to the law that limits foreign ownership of public utilities," Sarmiento said.

He said Halliburton is a "major contractor for ship repairs and maintenance that has done a lot of work for the US Navy."

"It has proposed to set up a facility at Subic and if it is able to do so, a lot of highly sophisticated ship repair and maintenance work can be done in the country, specifically at Subic," he said.

Sarmiento, however, said the proposed House bill would cover only ship repair and maintenance suited to Halliburton’s investments.

At present, he said such facilities are considered public utilities and thus, are covered by the law limiting foreign ownership to only 40 percent.

"The problem is there seems to be no Filipino counterparts ready to shoulder the 60-percent investment requirement," Sarmiento said.

Halliburton is reportedly ready to pump in some $170 million for the ship repair and maintenance facility.

Meanwhile, Sarmiento said the President also approved during the Cabinet meeting the revival of the mothballed Balog-Balog Dam in Tarlac which, when initially proposed during the term of former President Corazon Aquino, cost P250 million.

She also instructed the Department of Public Works and Highways to start "paper work" on the proposal to extend the North Expressway farther north to Rosario, Pangasinan.