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A
PROGRAM to raise cash for the Philippines’ port agency
may be delayed owing to concerns that it might be unable
to repay debts if it loses a court case.
Although
the state-led Development Bank of the Philippines (DBP)
has already approved the bond sale last week, First
Metro Investment Corp. (FMIC)—the lender’s partner in
the transaction—has yet to make a decision regarding the
P2-billion cash-raising exercise. This comes after the
Supreme Court, in a ruling, instructed the port agency
to provide additional compensation to landowners whose
properties were taken over by the government as part of
the Batangas Port project.
The
possible delay has alarmed the Philippine Ports
Authority (PPA) since a few of its big-ticket projects,
many of which are already in the thick of construction,
are expected to be funded by the bond sale’s proceeds.
When
sought for comment, DBP’s executive vice president
Armando Samia said that the lender’s board has already
approved the remaining P500 million, or the second
tranche of the bond float, last week.
“That’s
only DBP’s share of the float because we are
underwriting it with First Metro,” he said.
Meanwhile, port officials have ignored queries regarding
the status of First Metro’s decision involving its
P500-million float.
PPA
general manager Oscar M. Sevilla already informed
lenders that the agency will be blaming banks once funds
for port projects are delayed and contractors begin
demanding payment.
“I do
not know where their concerns are coming from because
there’s no decision yet on our case,” Sevilla said,
referring to the Batangas Port dispute.
In
August last year, a division of the Supreme Court upheld
an earlier decision of the Batangas Regional Trial Court
which ruled that compensation for landowners should be
set at P5,500 per square meter for the contested
1,298,340 square meters of land.
The PPA
only offered a price of P400 to P500 per square meter,
which they had already paid for, because the agency
claimed that the land is agricultural.
If the
court rules with finality, the PPA would have to shell
out an estimated P11 billion to P14 billion, including
interest and penalties.
The
agency has already used proceeds from the bond sale’s
first tranche in July. The bonds carry a 7-percent
interest rate, with a maturity of seven years.
Besides
being used to upgrade six priority facilities, the
proceeds are also expected to bankroll expansion of
wharves and piers all across the country.
Earlier,
the PPA envisioned that the major gateways will be on a
par with international standards by 2010.
The
agency will also develop more routes from Cagayan de Oro
through Camiguin,
Bohol, Cebu and Masbate
to Bicol or the Central Nautical Highway. |
