SUBIC BAY FREEPORT – Harbour Centre Port Terminal, Inc. (HCPTI), the country’s largest private commercial port operator for non-containerized cargo, has signed an agreement with the Subic Bay Metropolitan Authority (SBMA) to develop several ports here and transform Subic into the biggest industrial port and logistics hub in the Northern Luzon area.
SBMA administrator Armand Arreza said the agreement paved the way for a joint venture project between the SBMA and HCPTI that would specifically develop the Naval Supply Depot (NSD), a logistics center in this free port where the U.S. Navy used to store its supplies.
The joint venture would also give Harbour Centre the right to develop other areas in Subic, such as the Boton, Alava, Rivera and Bravo ports.
Arreza, SBMA chairman Feliciano Salonga, HCPTI chairman Reghis Romero II and HCPTI CEO Michael Romero signed the agreement at the EDSA Shangrila Hotel on Wednesday.
With the agreement, Harbour Centre pledged some P6-billion worth of investments for the NSD project. This is broken down into P3 billion for the improvement of the NSD area, and another P3 billion for the procurement of equipment necessary in the operation.
Arreza said the venture will last for a period of 25 years, during which HCPTI guarantees SBMA a minimum of $500,000 per year, plus an annual increase, inclusive of a variable commitment per metric ton of 20 percent depending on the volume.
The project would also involve the construction of warehouses, cold storage, a food terminal and an oil depot inside the 17-hectare NSD area, making it a multi-purpose terminal that is capable of handling various types of cargo.
Arreza said the SBMA is keen on pushing with the project, as it will be beneficial to the government.
“This will parallel the SBMA program to improve Subic’s capacity as a maritime logistics and service center,” he said.
He added that his office received HCPTI’s unsolicited proposal in November 16. “After evaluating it, we presented it to the board (of SBMA) and then went on to renegotiations with both parties,” Arreza said.
He added that the renegotiations took 30 days, and this effectively put things into perspective and that all agreement done would be converted into terms of reference.
Arreza added that another bidder could give a higher offer, subjecting it to Swiss challenge wherein HCPTI has the right to match any offers given by the other bidder.
Meanwhile, HCPTI chairman Reghis Romero stated that they are very confident that they will get the contract for the operation of the ports in Subic.
According to Romero, the company forecasts to service six million metric tons or more of cargo in Subic.
“The point is how much cargo can you increase so that the Philippine economy will benefit,” Romero said. “It’s not only in providing the services, but also getting the locators by providing more cargo for their specific port.”
Arreza also explained that the NSD port is now used for unloading heavy machinery, vehicles and grains, adding that the NSD “is more than capable of handling 2 million metric tons every year.”
“For them to break even, they have to service around 4 to 5 million metric tons of cargo. HCPTI is confident that they can do so,” Arreza added.
Currently, the NSD terminal caters to the port requirements of businesses in Central and Northern Luzon and the Subic Bay Freeport.
The water frontage of NSD terminal is around 800 meters wide and is partially bulk-headed with most of the area having rock-rubble shore protection.
NSD has an open storage and transit area of approximately 6.26 hectares.
SBMA administrator Armand Arreza said the agreement paved the way for a joint venture project between the SBMA and HCPTI that would specifically develop the Naval Supply Depot (NSD), a logistics center in this free port where the U.S. Navy used to store its supplies.
The joint venture would also give Harbour Centre the right to develop other areas in Subic, such as the Boton, Alava, Rivera and Bravo ports.
Arreza, SBMA chairman Feliciano Salonga, HCPTI chairman Reghis Romero II and HCPTI CEO Michael Romero signed the agreement at the EDSA Shangrila Hotel on Wednesday.
With the agreement, Harbour Centre pledged some P6-billion worth of investments for the NSD project. This is broken down into P3 billion for the improvement of the NSD area, and another P3 billion for the procurement of equipment necessary in the operation.
Arreza said the venture will last for a period of 25 years, during which HCPTI guarantees SBMA a minimum of $500,000 per year, plus an annual increase, inclusive of a variable commitment per metric ton of 20 percent depending on the volume.
The project would also involve the construction of warehouses, cold storage, a food terminal and an oil depot inside the 17-hectare NSD area, making it a multi-purpose terminal that is capable of handling various types of cargo.
Arreza said the SBMA is keen on pushing with the project, as it will be beneficial to the government.
“This will parallel the SBMA program to improve Subic’s capacity as a maritime logistics and service center,” he said.
He added that his office received HCPTI’s unsolicited proposal in November 16. “After evaluating it, we presented it to the board (of SBMA) and then went on to renegotiations with both parties,” Arreza said.
He added that the renegotiations took 30 days, and this effectively put things into perspective and that all agreement done would be converted into terms of reference.
Arreza added that another bidder could give a higher offer, subjecting it to Swiss challenge wherein HCPTI has the right to match any offers given by the other bidder.
Meanwhile, HCPTI chairman Reghis Romero stated that they are very confident that they will get the contract for the operation of the ports in Subic.
According to Romero, the company forecasts to service six million metric tons or more of cargo in Subic.
“The point is how much cargo can you increase so that the Philippine economy will benefit,” Romero said. “It’s not only in providing the services, but also getting the locators by providing more cargo for their specific port.”
Arreza also explained that the NSD port is now used for unloading heavy machinery, vehicles and grains, adding that the NSD “is more than capable of handling 2 million metric tons every year.”
“For them to break even, they have to service around 4 to 5 million metric tons of cargo. HCPTI is confident that they can do so,” Arreza added.
Currently, the NSD terminal caters to the port requirements of businesses in Central and Northern Luzon and the Subic Bay Freeport.
The water frontage of NSD terminal is around 800 meters wide and is partially bulk-headed with most of the area having rock-rubble shore protection.
NSD has an open storage and transit area of approximately 6.26 hectares.
