Publicly-listed Asian Terminal Inc. is expected to challenge the 25-year exclusive contract of Harbour Centre Port Terminal Inc. (HCPTI) to operate the bulk and break bulk cargo in Subic as the Subic Bay Metropolitan Authority has granted existing cargo handlers an audience to air their side this Friday.

SBMA Administrator Armand C. Arreza said that ATI manifested to participate in the Swiss Challenge, deadline of submission at 5 p.m. of April 12, when it bought a copy of the terms of reference. A copy can be had for P150,000.

“It is a go. There is no legal impediment against it,” Arreza said.

Arreza explained that the existing stakeholders in the Subic wharf, who strong opposed to the joint venture between HCPTI and SBMA, were invited to attend the SBMA board meeting on Friday to convince the members of their position.

SBMA, however, cannot grant a public hearing because there is no basis for such as public is only for policy changes that affect the public since this is a joint venture then those invited are representatives from the private sector, the stakeholders, the Commission on Audit and the National Economic and Development Authority.

Arreza said that if the oppositor groups of Mega Equipment International Corp. (MEIC), Amerasia International Terminal Services Inc., Subic Seaport Terminal Inc. and Subic Bay Freeport Grains Terminal Services Inc. can convince majority of the 15 members of the SBMA board on Friday, March 18, then there is the possibility that the Swiss challenge may not proceed.

But during the last meeting, there was no dissent and only two abstentions for conflict of interest.
“Foremost, from a commercial point, the HCPTI’s unsolicited proposal is most advantageous to SBMA. The offer f Mega and Amerasia was a lot inferior,” Arreza stressed.

Based on the negotiated terms reached with HCPTI and SBMA, the Reghis Romero-owned company has agreed to a $32 million or equivalent to P1.5 billion fixed and guaranteed revenue share over a 25-year joint venture period.

HCPTI has also agreed to a 15 percent share of cargo handling revenues generated from cargo volumes in excess of 2 million metric tons or an approximate 25 year total income of P197.74 million for SBMA. This share increases to 16 t 17 percent based on actual volume.

At present, SBMA has an annual income of P17 million from marine terminal cargo handling operations of 1.4 million metric tons per year.

On the other hand, the unsolicited proposal of Mega and Amerasia did not contain any offer for the guaranteed revenue share.

In addition, HCPTI has committed to invest P6.54 billion for in investments spread over a 25-year period for port enhancement facilities, construction of new facilities, expansion of ports, additional machineries and equipment and IT and infrastructure. HCPTI has also offered a guaranteed minimum investment of P200 million for the first three years secured by a performance bond.

Comparatively, the Mega-Amerasia has proposed for P600 million investments only in the first three years of the 25-year contract.

In terms of minimum cargo volume, HCPTI has committed cargo volumes of 1.3 million metric tons on the first year and ramping it up to 1.4 million MT and 1.5 million MT on the second and third year of operations, respectively.

In the event that the committed annual cargo volume is not achieved, HCPTI shall pay SBMA P40 per metric tone of deficiency.