Home » Ports/Terminals » North Harbor partners each show proof of financial muscle

Who gets to operate port still unclear

THE North Harbor will definitely be modernized but by whom remains a question.

Harbour Centre Port Terminals, Inc (HCPTI) and Metro Pacific Investment Corp (MPIC) — joint venture partners in Manila North Harbour Port, Inc (MNHPI) — separately submitted to the Philippine Ports Authority (PPA) proof of their financial capability to finance improvement of the North Harbor.

Last week, the port agency gave MPIC and HCPTI an ultimatum to settle their quarrel over ownership, saying it will cancel the port contract if the issue is not settled soon. The agency also directed each to show proof of financial muscle to ensure that the surviving entity in the joint venture — assuming the partnership breaks up — will be capable of financing the massive undertaking.

It may be recalled that MPIC, which currently owns 35% of MNHPI — holder of the 25-year management, operation and modernization contract for the North Harbor — wants a controlling share in the joint venture. MPIC chairman Manuel V. Pangilinan threatened to leave the partnership if he does not get his way. The Romero Group-controlled HCPTI, which owns 65% of the venture, is not keen on being a minority shareholder.

PPA declined to give details of guarantees submitted by HCPTI and MPIC but sources said they are well within the requirements, including showing proof of at least P100 million in working capital representing the estimated monthly operating costs at the North Harbor; at least P70 million cash representing the estimated past service benefits to be paid to the remaining 495 absorbed workers; and at least P2.048 billion representing capital expenditures for the first two years under the contract.

Between the joint venture partners, MPIC is the acknowledged project financier. It issued the P100.8-million performance bond to guarantee MNHPI compliance under the contract; the upfront fee of P18 million; and the initial amount of P41.5 million representing full payment of past service benefits to 403 of the total 899 absorbed port workers.

MPIC also guaranteed procurement of additional cargo-handling equipment through a P120-million credit line agreement now being withheld unless the company gets a controlling share in MNHPI.

HCPTI provides technical capability on port operations.

Earlier, local carriers operating at the North Harbor backed MPIC’s desire to control MNHPI, claiming a takeover by the Pangilinan-led firm will result in more efficient port processes. Pangilinan chairs some of the country’s biggest and most profitable companies, including the Philippine Long Distance Telephone Company and Manila Electric Company.

The North Harbor has been in chaos since its takeover by MNHPI on April 11, 2010, mainly due to a lack of cargo-handling equipment.

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