Subic Port Row May End Up In Court

Subic Bay Freeport, which earlier this month was ordered by President Fidel Ramos to reappraise its decision to choose Hutchison over International Container Terminal Services ), upheld its choice on Monday.

Officials at Subic, which had ruled out ICTSIs bid on grounds it controlled the countrys largest port and was debarred by competition regulations from controlling more than 20 per cent of a rival port, said Hutchison had submitted a superior business plan.

We will get a fairer hearing in Malacanang [the presidential palace] rather than the SBMA [Subic Bay metropolitan authority], said Enrique Razon, chairman of ICTSI. We still have the option of going to the Supreme Court.

 

Ramos, who denied the validity of the competition law cited by Subic, had ordered the freeport to reappraise the bids on purely financial grounds.

Ramos said that the decision to choose Hutchison, which bid $20.5 per 20ft equivalent unit (TEU) or less than half ICTSIs bid of $57 per TEU, would cost the Philippine taxpayer up to 6 billion pesos ($230 million) a year.

Subic officials, however, said that Hutchison had offered to invest more in upgrading the port including the construction of a new wharf within four years.

This would increase the ports capacity to 14 million TEUs a year or more than double ICTSIs bid, they said.

ICTSI, which says it will challenge Subic on financial grounds and stresses it will not contest Subics right to award the contract to a foreign company, controls about 70 per cent of the countrys container traffic. Subic Bay, a US naval base until 1991, has attracted over $1 billion in foreign investment since 1994.