THE PHILIPPINES has the potential to grow its shipbuilding and ship-repair businesses, but it has to resolve several constraints first, government officials said yesterday at the Philippine International Maritime Conference and Exhibition 2011 held at the World Trade Center in Pasay City.
“Ship repair is a very profitable industry… [the Philippines] can take advantage of… the strategic location of the country to shipping routes,” Emerson M. Lorenzo, Maritime Industry Authority Administrator, said in a speech during the conference.
Mr. Lorenzo said the country’s ship-repair industry now relies on an “ageing domestic merchant fleet” to survive.
For shipbuilding, he said, the country still has “very few” projects, even as business has picked up since 2006.
“The size and number of locally constructed ships like tanker and passenger ferries showed increasing trend since 2006,” he said.
One of the basic problems of the shipbuilding and ship-repair industries, Mr. Lorenzo said, is projects’ generally bigger costs.
Another problem is having “less efficient operations” compared to foreign shipyards, as local ones take longer to build or repair vessels.
“Domestic shipowners prefer to have new ships constructed in foreign shipyards due to lower cost and shorter delivery time,” Mr. Lorenzo said, adding that they also “prefer to have their ships drydocked and repaired in foreign shipyards due to lower expenses and shorter downtime.”
Mr. Lorenzo cited the need for “financing and incentives for local shipyard modernization and upgrading.”
One way to draw business despite current constraints is to forge joint ventures between local and foreign shipyards.
Shipyard skill training and technical education programs should also be in place, he added.
Transport Undersecretary Rafael Antonio M. Santos said in the same conference that the small size of the country’s fleet is a key constraint to industry growth.
“Majority of the Philippine domestic fleet are small, wooden-hulled and of motor-banca type,” Mr. R.A.M. Santos said.
Rising cost of ship parts, ship repair and other maintenance expenses is also a major hurdle to industry growth, he added.
He said the government also hopes to provide “sustained development” of seafarers.
“Sustaining the Philippines’ position as a premier provider of qualified ship officers for deployment… [is one of the] challenges for the seafaring sector,” he said.
Meanwhile, Raul T. Santos, Philippine Ports Authority (PPA) assistant general manager, said in the same conference that the government expects annual growth of cargo volume to hit 5% this year.
“[Growth in] cargo volume will be around the range [sic] of 5%,” Mr. R.T. Santos said, noting that domestic and foreign cargo volume in 2010 totaled 166.396 million metric tons.
In order to support an increase in capacity, ports in the country have been undergoing development, Mr. R.T. Santos said.
“Development of gateway ports… [aims to] improve the capacity, productivity, efficiency and safety of ports,” he said.
Partnership
The developments are being implemented in partnership with private firms, he said.
An example would be the Manila International Container Terminal Development Plan being implemented by International Container Terminal Services, Inc.
Asian Terminals, Inc., on the other hand, has been undertaking construction and rehabilitation of port facilities at Manila’s South Harbor, he said.
For the North Harbor Modernization project, he said Manila North Harbour Port, Inc. is expected to complete the development plan for the first phase in 2013.
“PPA will prioritize the projects lined up for major ports to delineate which ones can be accommodated in its budget from those which will be covered by public-private partnership (PPP) initiatives,” Mr. R.T. Santos said.
There are four port development projects in the government’s list of 18 “prospective” PPP projects under the jurisdiction of the Department of Transportation and Communications, namely: Davao Sasa Port, Central Roll On-Roll Off Spine Development, Selected Major Port Privatization and Maritime Aids to Navigation Program.
PPA had said last June that it was considering to auction off contracts for the development of Manila Bulk Terminal, as well as the ports of Davao, Cagayan de Oro, General Santos and Zamboanga in Mindanao.
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By: K. A. Martin
Source: Business World, Nov. 14, 2011
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