SUBIC BAY FREEPORT— The Subic Bay Metropolitan Authority (SBMA) has not been giving preferential treatment to Hanjin Heavy Industries Corp.-Philippines (HHIC-Phil), the South Korean investor that is operating a $1.7-billion shipyard at Subic’s Redondo Peninsula.

This was clarified by lawyer Ramon Agregado, SBMA senior deputy administrator for support services, as the Senate called for an inquiry into the incentives and privileges given by the SBMA to HHIC-Phil.

Senator Loren Legarda, who has filed a resolution to inquire on Hanjin’s privileges, had said that the investigation seeks to come up with measures “to ensure that the preferred status of investors in economic zones are not abused.

” However, Agregado said on Tuesday that the SBMA is > giving equal treatment to all locators and investors > operating in the Subic Bay Freeport Zone.

“Like all other locators in Subic, Hanjin gets no preferential treatment,” Agregado said.

“Of course, we have to prioritize some of Hanjin’s extraordinary requirements because of its tight construction and delivery schedule, but there were no short cuts nor special privileges given,” he added.

“And even if some of these gets prioritized, there have been no complaints from other business locators that Hanjin’s prioritization is to their prejudice,” he also said.

Agregado also stressed that while the SBMA provides major investment incentives to both local or foreign investors, there are also rules and regulations that govern such privileges.

He said the incentives include tax- and duty-free importation of raw materials, capital equipment and other items for consumption within the Freeport; exemption from local and national taxes; unrestricted entry of investments; no foreign exchange control, which allows full repatriation of profit; visas for foreign nationals; and regional enterprise incentives.

In the case of Hanjin, “we have used full regulatory powers regarding its extraordinary requirements, but we try to make the process more efficient,” Agregado added.

These regulatory powers have enabled the SBMA to stop some of Hanjin’s importation due to pending collectibles, and to penalize the company for violating requirements on environmental clearance certificate (ECC) and the use of non-accredited sub-contractors, Agregado said.

“We even denied Hanjin’s claim for exemption on wharfage fee, even when the company has built the wharf that it’s now using,” he added.

Agregado also said that Hanjin has not been given special rates for the 350 hectares that it is using for its shipbuilding operations.

“They have offered $3.50 per sqm for the land lease, and I think that is just fair, considering the size of their investment, the volume of employment created, and the fact that that there are no existing utilities in the area,” he said.

“There are continuing efforts to make Hanjin comply with SBMA regulations and guidelines,” he also said, pointing out that the SBMA has required Hanjin to follow guidelines on wage-related issues, working conditions, shipyard operation which was coordinated with Maritime Industry Authority (MARINA), immigration policies, as well as fees and relocation of affected settlers.

Agregado also explained that SBMA had to respond to Hanjin’s tight schedule because the company is a shipbuilder with clients all over the world.

He said that Hanjin has started its shipyard > operations only after it signed an investor’s contract in February 2006, but is now set to deliver the first ship it built in Subic in June this year.

Agregado also said that the company because of the magnitude of its operations, Hanjin has made a huge economic impact in the Subic Bay area.

He said Hanjin and its sub-contractors now employ close to 17,000 workers, and had built its own Skills Development Training Center, which is now the world’s largest training facility dedicated to shipbuilding workers, and provides technology transfer to Filipino workers.

Agregado also cited Hanjin for the value added to its shipyard site at the Redondo Peninsula, which is now being eyed by other investors, as well as the economic benefits the company has given downstream companies like those that engage in providing food supplies, workers’ uniforms, housing accommodations, transport system, and other services required by the Korean shipbuilder. (30)