Subic Bay Metropolitan Authority (SBMA) and International Container Terminal Services, Inc (ICTSI) have stepped up their efforts to promote the former US naval base located 110 kms north of Manila as a base load container port
At a recent regional business conference organised by the Philippine Chamber of Commerce and Industry (PCCI), SBMA’s senior deputy for operations Ferdinand Hernandez urged businessmen from Central and Northern Luzon to ship their goods through Subic instead of Manila.
He cited, inter alia, the Freeport’s proximity to manufacturing bases in the area, world class port infrastructure, competitive tariffs, ICTSI's port expertise and shorter trucking times due to the opening in April of the 94-km Subic-Clark-Tarlac Expressway.
Meanwhile, the adjacent NCT-2 (annual capacity 300,000 TEU) remains idle pending privatisation. The most basic problem facing both the SBMA and ICTSI is that manufacturing activity remains concentrated in Metro Manila, Rizal province to the east, Batangas and Laguna provinces to the south and Bulacan province to the north.
This helps explain why ICTSI’s throughput in the first half of 2008 was up 16% at its flagship Manila International Container Terminal and down almost 11% in Subic.
Supportive PCCI officials are said to be considering the use of crane barges to tranship through the Freeport containerised cargoes from Manila, the Port of Batangas south of the capital and Bataan province near Subic.
In 2007 the old NSD terminal, operated by ICTSI from August 2000 until it moved to the newly built NCT-1 in April this year, cleared 36,451 TEU. Assuming a cumulative annual volume growth of 20%, the NCT-1 could reach half of its design capacity of 300,000 TEU/year only by 2015.
SBMA is also set to receive comparative proposals not later than 22 January 2009 for the management and operation of NCT-2 notwithstanding falling volumes at the Freeport north of Manila and the possibility that foreign investors may stay away because of the global financial crisis.
For the first nine months of 2008, ICTSI has reported a 14.3% drop in the number of containers handled by its subsidiary, Subic Bay International Terminal Corp (SBITC). This was the worst performance, volume-wise, by a major ICTSI unit during the period--overshadowing the 6% and 7.9% slump at its concessions in Poland and China, respectively.
As in the Manila North Harbor case, SBMA officials apparently are determined to privatise NCT-2 before 2010, when President Gloria Arroyo is due to finish her six-year term. Given the worldwide economic picture, ICTSI, which took over NCT-1 in April, could well be the one to fulfil their objective.
ICTSI has posted 3Q/08 earnings from port operations of PHP5.68B (US$117.3B), an increase of 35% on the same period last year. Consolidated volume was up by 26% in 3Q/08 compared to 3Q/07, at 1,021,499 TEU. In 1Q-3Q/08, the group handled 2,776,972 TEU, up 33% on 1Q-3Q/07. Domestic operations accounted for 530,463 TEU (52%) in 3Q/08. Foreign container volume grew 23% in 3Q/08 compared to 3Q/07, driven principally by the addition of the company’s Ecuador, Syria and Georgia port operations, and exceptionally strong growth at the company’s operations in Brazil and Madagascar. In 1Q-3Q/08, ICTSI invested PHP6.06B, mainly to expand the handling capacity and improve the operating efficiency of its operations in Manila, Brazil and Madagascar, and pay for the acquisition and rehabilitation of the new concessions in Ecuador, Syria, Georgia, and Colombia.
