The Subic facility of failed shipbuilder Hanjin Heavy Industries and Construction-Philippines, Inc. (HHIC-Phil) may be considered as a possible location for the country’s first eco-industrial maritime park, according to the Maritime Industry Authority (Marina).
Establishing an eco-industrial maritime park is part of the Maritime Industry Development Plan (MIDP) 2019-2028, Marina’s decade-long roadmap that aims to accelerate the achievement of a nationally integrated and globally competitive Philippine maritime industry.
“The state-of-the-art facilities of HHIC-Phil may be considered as an option for the establishment of an eco-industrial maritime park for the clustering and consolidation of all maritime-related services, thereby accelerating the implementation of the program,” Marina said in a statement.
The roadmap has eight priority programs, one of which is to make the Philippines a global maritime hub. Projects under this priority program include an eco-industrial park, whose locators may include shipyards, ancillary industries, and technical/legal/logistics services, both in domestic and global markets.
Already approved by the Marina Board, the draft MIDP is up for the approval of the President and the National Economic and Development Authority this year.
Marina has been encouraging and inviting businessmen to invest in the establishment of the eco-industrial park.
With the global maritime hub program, Marina said it expects to transform the Philippines as the “go-to location” for international shipbuilding and ship repair and a central point for accumulation and distribution of cargoes for worldwide trade.
The agency also aims to sustain the premier position of the Philippines as the source of globally competitive maritime professionals.
In support of this program, Marina has streamlined its business processes and rationalized its policies on the registration and licensing of shipyards as initial steps to entice investors to pour their capital into shipbuilding.
Marina has also partnered with various government agencies to accelerate the processing of documents for the establishment of shipyards and other ancillary services, including arrangements with financial institutions for possible funding of companies’ needed capital.
Meanwhile, Marina said it views the recent developments at HHIC-Phil as “a new challenge for the country’s maritime industry, noting that [HHIC-Phil] is one among the major shipyards that catapulted the Philippines to become the 5th largest shipbuilding country in the world on top of its revenue contribution due to the government and the provision of employment opportunities to thousands of Filipino shipyard workers.”
HHIC-Phil has recently been placed under rehabilitation by the Regional Trial Court (RTC) of Olongapo City after the shipbuilder on January 8 filed a petition for voluntary rehabilitation under Republic Act No. 10142, or An Act Providing for the Rehabilitation or Liquidation of Financially Distressed Enterprises and Individuals, citing financial obligations to Philippine and Korean lenders.
HHIC-Phil owes Philippine banks US$412 million in outstanding loans, on top of another $900 million in debt to lenders in South Korea.
Korean newspapers said South Korean-based Hanjin Heavy Industries and Construction Holdings Co., Ltd., (HHICH) and its affiliate HHIC-Phil have been suffering from a drop in new orders amid the protracted slump in the global shipbuilding sector. HHICH has also been conducting massive restructuring efforts since 2016 by selling non-core assets.
HHIC-Phil is Subic Bay Freeport’s biggest locator, with a 300-hectare shipyard and an infusion of $2.3 billion in direct investment, and employing about 30,000 workers at the peak of its operations. Since 2008, the facility has built 123 vessels, according to its website.
Earlier, Defense Secretary Delfin Lorenzana said several options, including government takeover, are being considered by the Philippine government to help HHIC-Phil. Last January 17, Lorenzana said President Rodrigo Duterte is “very receptive” to the idea of the state taking over the management of HHIC-Phil so the government can build its own vessels.
Another option is to open the shipbuilder to acquisition by other companies from the US, Japan, South Korea, and Australia.