PortCalls

MARINA to NENACO: No P1.5B, no operation permit

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

PEZA , BOC bring AEDS to Cebu

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.

MOL charters 6 vessels for new feeder service

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.

Archives

April '04