NEGROS Navigation Company (NENACO) must first infuse
P1.5 billion in fresh capital before the Maritime
Industry Authority (MARINA) lifts its suspension order
on the carrier's vessel operations.
MARINA administrator Oscar M. Sevilla said NENACO
was found to be "financially unstable" following an
assessment of its financial condition. On April 26,
the agency ordered the shipping line to submit its
audited financial statement ending December 2003 as
part of the requirement for the application of an
operating permit.
"Applying the formula under section V.9 of memorandum
circular 161, this authority's Domestic Shipping Office
conducted financial evaluation on the said financial
statements and it was found that applicant has a capital
deficiency in the amount of P1.509,252,776," the agency
said in a statement.
"An increase in the capitalization of the applicant
must therefore be undertaken in order to ensure maintenance
of its existing operation and before further grant
of any authority to operate to applicant company,"
MARINA added.
In a recent briefing, Sevilla stressed the need for
shipping lines to have a sound financial standing.
"In the case of an accident, where would they get
the money to pay a rich passenger who decided to sue
and demanded to get more than the mandatory P100,000
indemnity, as payment for damage?" he asked.
Last Friday, MARINA denied NENACO's application for
extension of its operation permit, leading to the
grounding of five vessels - the San Lorenzo Ruiz,
St. Joseph The Worker, St. Peter The Apostle, San
Paolo and Princess of Negros.
Thousands of passengers were also stranded. Since
the suspension, NENACO said it has lost revenues of
P3 million a day per vessel.
NENACO's woes apparently began to unravel when Cebu-based
Tsuneishi Heavy Industries accused it of not being
able to pay more than P100 million in shiprepair and
drydocking fees.
Consignees will have
to shoulder 10% VAT on port charges
THE 10% value-added tax (VAT) to be charged on all
seaport services recently ordered by the Bureau of
Internal Revenue (BIR) has not surprised local shippers
and other port users.
Freight forwarding firms interviewed by PortCalls
said the sector is left with no choice but to pay
the costs since the directive is mandated by law.
"We have no problem with the additional VAT because
it is regulated. It is something which the Philippine
Shippers Bureau (PSB) cannot control," April Lim,
Mercury Freight International, Inc. vice president
for Marketing, said.
The PSB is the government agency that regulates the
forwarding community. According to Lim, an additional
charge such as this is often passed on to consignees.
She said her company rarely has problems offsetting
the cost because most consignees understand the process.
AE Eagle Philippines, Inc. president Ding Syco agreed,
adding VAT is a cost usually shouldered by end-users.
"An additional cost is something that will always
translate into a chain reaction among the members
of the supply chain. This eventually drops on the
lap of the ultimate consumer," he said. "We do not
carry the costs but we always end up being the shock
absorber of consignees," he shrugged.
Lester Miclat, Ocean Services manager of Sky Freight
Forwarders, Inc., said passing the cost, however,
is not always a safe way out. "Some consignees are
VAT-exempt, especially the Philippine Economic Zone
Authority-accredited firms," he pointed out.
Mercury Freight's Lim said if such a case arises,
the company would have to either shoulder the cost
and pay the tax itself or incorporate it into other
charges. The BIR recently ordered the Philippine Ports
Authority to collect a 10% VAT on all port services.
These include port dues or harbor and anchorage fees,
dockage berthing, usage fees, wharfage fees, storage
fees, lay-up fees, stevedoring, and other fees.
Under Memorandum Circular No. 2-2004, the tax bureau
said VAT has been expanded to cover all types of service
not explicitly exempted by law. - Maritess R. Mesias
THE Philippine Economic Zone Authority (PEZA) and
the Bureau of Customs (BOC) recently forged an alliance
with a group of locators in Cebu to further enhance
the documentation process for electronic goods.
The two agencies signed last week a memorandum of
agreement with the Mactan Export Processing Zone Chamber
of Exporters and Manufacturers (MEPZCEM) for the implementation
of the Automated Export Declaration System (AEDS)
in the area. PEZA director general Lilia de Lima said
the system will be able to reduce the number of documents
required for shipment of exports from three or more
to only one.
The AEDS has met success in economic zones in Luzon
where at least 200 electronics and semiconductor companies
are located. The system is at present limited to the
semiconductor industry which accounts for 60-65% of
the country's total export earnings.
PEZA earlier said it is, however, planning to expand
the coverage of the AEDS to other export products
with garments and textiles next on its list.
The authority said the system will also help exporters
do away with inventory expenses since it helps achieve
just-in-time shipments and eliminates direct intervention
of both Customs and PEZA officials. Also, the AEDS
uses a selectivity criteria which identifies automatically
which shipments should be examined, thus reducing
physical inspection of cargoes.
The selectivity criteria is based on the nature of
goods in the shipments; the possibility of domestic
sale of the goods that may cause diversion of the
cargo; record of performance of the exporting company;
and the time it would take the shipment to be moved
from the economic zone to the exit point.
ICTSI
Polish terminal signs agreement with equipment suppliers
BALTIC Container Terminal, International Container
Terminal Services, Inc.'s pioneer European terminal
in Gdynia, Poland, recently signed purchase agreements
with various equipment suppliers to complete the first
phase of the company's 15-year US$80 million terminal
expansion program.
Equipment acquisitions for the first phase are one
Panamax ship-to-shore crane by Kone of Finland for
delivery in June 2005; four RTGs from Kalmar for delivery
in August 2004; and eight prime movers - also from
Kalmar - five for delivery in June 2004 and three
in June 2005. An agreement with Buiscar was also recently
signed, covering the purchase of 11 40-foot internal
trailers - six for delivery in June 2004, five in
May 2005.
Starting in May, BCT's eight existing RTGs will be
reconfigured from a three-high stacking arrangement
to five-high. This will be completed in October.
The total cost for these equipment acquisitions and
modifications was almost US$12 million. Sourcing,
evaluation of offers, and bidding were done electronically
at ICTSI's main office in Manila using the Ariba sourcing
facility.
Some $80 million has been earmarked for the expansion
of the BCT to increase terminal capacity to over one
million TEU.
The investment focuses on equipment acquisition and
upgrade, information technology development and manpower
development.
MITSUI OSK LINES (MOL) recently chartered six vessels
for its new feeder service connecting the Manila International
Container Terminal with Asian ports.
The vessels are chartered for MOL's Bangkok-Manila-Tokyo-Yokohama-Shimizu-Nagoya-Pusan-Laem
Chabang feeder service. The vessels are the 1,001-TEU
capacity MOL Silver Fern, MOL Kauri, and MOL Evolution;
and the1,032-TEU capacity MOL Grace, MOL Bright, and
MOL Harmony. MOL calls twice weekly at the MICT a
week.
The MICT is managed and operated by International
Container Terminal Services, Inc.
