Subic Bay Metropolitan Authority (SBMA), Philippines
For
most of the last century Subic Bay in the Philippines was the U.S. Navy's
largest ship repair and reprovisioning facility outside the United States. When
the Navy's lease on the base facilities ended in 1992, the Philippine
government created in its place an export-oriented Freeport Zone (SBFZ)
administered by the semi-autonomous Subic Bay Metropolitan Authority (SBMA).
The World Bank has provided funding to SBMA for a number
of projects, including Institutional Strengthening. The Services Group (TSG)
has been retained to advise SBMA under this contract. As one of its tasks, TSG
has assisted SBMA in formally establishing the Privatization and
Commercialization Office (PCO), including the development of a business plan to
guide the structure, operations and financing of this new organizational unit.
The PCO will initially focus SBMA privatization efforts on four priority
transactions:
1)ÊConcession
to operate the power distribution network
2)ÊDisposal
of selected real estate for development
3)ÊOutsourcing
the collection of solid waste and the operation of landfills
4)ÊOutsourcing
the promotion of tourism
There
are a number of other projects for implementation over the longer term.
For
further information on the relevant project, please contact the SBMA
Privatization and Commercialization Office (PCO) via email: attydequit@hotmail.com and visit the
TSG webpage: http://www.tsgsubic.com/privatization.html
Privatization
of Power Distribution System. The Services Group (TSG) has been supporting the
Subic Bay Metropolitan Authority (SBMA) and its Privatization and
Commercialization Office (PCO) in preparing a transaction for the power
distribution network of the Freeport. The SBMA plans to undertake this
transaction in accordance with relevant !
provisions of the Build Operate Transfer
(BOT) law of the Philippines.
The
SBMA's Power Services Division is in the Utilities Department under the Public
Works and Technical Services Group. At present this Division sources electric
power from the National Power Corporation (NPC). In the near future, this
sourcing arrangement will be changed - SBMA has signed a Power Supply Agreement
(PSA) with Bay Power Inc (BPI), a private company, which has a power plant
under construction within the Freeport.
SBMA
services some 400 locators (industrial and commercial businesses), more than
1500 residences and about 138 SBMA facilities, including an airport and a
seaport. Demand peaked at 42 MW in 1999. Consumption is approximately
175,000,000 kWh. Installed transformer capacity is some 80 MVA. The incoming
transmission line is 69 kV and the distribution network is 13.8 kV. There are 3
voltage levels: 120V, 220V and 480V.
The
distribution system currently under SBMA management lacks maintenance
equipment, and there are limitations in personnel. These and other problems
have caused substantial electricity losses (technical system losses are
estimated at 18-20%), frequent power interruptions and fluctuations,
particularly in certain zones (approximately 100 unscheduled power
outages/year), and delayed restoration of service after interruptions.
SBMA
faces potential rapid growth in demand because of the nearing completion of
Phase 2 of the Subic Bay Industrial Park (SBIP) and the additional activity
that will be generated by the new port container terminal. Ensuring an adequate
and reliable supply of power is a critical issue and top priority of the SBMA.
The Board of SBMA has decided to proceed with an international tender to grant
a concession to operate the SBFZ's power distribution network. Concession is
the preferred modality. For further information on the relevant tender process,
please contact the SBMA Privatization and Commercialization Office (PCO) via
email: attydequit@hotmail.com and
visit the TSG webpage: http://!
www.tsgsubic.com/privatization.html
Real
Estate Transactions. The Services Group (TSG) has helped the Subic Bay
Metropolitan Authority (SBMA) form and train a multi-disciplinary group now
moving forward with an ambitious program to commercialize real estate assets.
The approach is based on competitive tender processes, wherein developers of
industrial, commercial and residential real estate will be invited to submit
bids on key properties. Transactions will include long-term leases and sale of
usufruct rights in one of South East Asia's most interesting trade and tourism
hub locations.
SBMA's
"Pro-Active Marketing" program is being undertaken in at least three
successive phases between now and the year 2005. The first phase, begun in
Spring, 2000, "Pro-Active Marketing 2000," has identified five
properties for disposition through long-term leases to private real estate
investors who will plan, construct, market and manage strategically located
sites within the Freeport.
The
objective of the Year 2000 pro-active land marketing effort is to publicize for
disposition the five individual properties for private investment within the
Freeport. Reflecting the variety of their development characteristics, these
properties are located in several different districts. Two will be suitable for
commercial development within the Central Business District; one has been designated
for apartment residential development; one will be suitable for
resort-hospitality or retirement residence purposes; and one site will be
offered for a privately-financed Subic Convention Center.
"Pro-Active
Marketing" will be conducted by SBMA personnel, supplemented by experts
from TSG. Participating SBMA personnel have been formed into a working group,
the Special Operations Land Disposition ("S-O-L-D") team. Potential
developers are now being contacted to express their interest in prequalifying
as potential competitors.
For
further information on the relevant tender process, please contact the SBMA
Privatization and Commercialization Office (PCO) via email: attydequit@hotmail.com and visit the
TSG webpage: http://www.tsgsubic.com/privatization.html
Privatization of SBMA's Solid Waste Management and
Landfill Operation, Philippines
Privatization
of Solid Waste Management and Landfill Operation. The Services Group (TSG) has
been supporting the Subic Bay Metropolitan Authority (SBMA) and its
Privatization and Commercialization Office (PCO) in preparing a transaction for
the solid waste management and landfill operation of the Freeport. The SBMA
plans to undertake this transaction on the basis of a management contract.
SBMA
is currently both the service provider and regulator of solid waste management
activities in the Subic Bay Freeport Zone (SBFZ) and these conflicting
functions are causing some problems. Outsourcing the service function has been
suggested to alleviate this issue, besides improving the quality and cost of
waste disposal operations. The activity consists of both collecting trash and
garbage, and managing a landfill.
Organizationally,
the Waste Management Division (WMD) under the Ecology Center, which reports
directly to the Chairman, supervises the Solid Waste Management Operations
Group. The Group employs 60-70 persons and collects approximately 500 tons of
solid waste per day, which comes from households, commercial and industrial
enterprises, construction sites, yards and sanitary sources. Excluded is
"hazardous waste," such as used oils and solvents, waste water, etc,
which the locators dispose of through directly contracting the services of
special haulers who transport it to treatment facilities that are accredited
and monitored by the WMD. Many locators also contract regular waste collection
from service providers that are less expensive than the SBMA.
The
current landfill area, a 12-hectare dumpsite, is expected to reach its full
capacity within the next 3-5 years. It is undergoing rehabilitation and
upgrading work by Vector financed by the Japan Bank for International
Cooperation (JBIC), which is to be completed in the second half of 2001.
Meanwhile, a new 20-hectare landfill site has been selected, that is the
subject of engineering design and financial studies by JBIC. This first phase
is to be finished by mid-2001. Actual construction costs are also expected to
be funded by JBIC.
SBMA
intends to issue a tender calling for bids for proposals to operate the solid
waste collection and landfill under a management contract, either together or
singly. It is proposed that the initial contract would be for managing the
current landfill, with an option to take over the new landfill when it begins
operations. SBMA would retain ownership of assets like dump trucks, compactors,
bulldozer, vehicles, etc, besides the landfill property itself, as well as
being responsible for amortization of JBIC or other loans and any required
foreign technical assistance. For further information on the relevant tender
process, please contact the SBMA Privatization and Commercialization Office
(PCO) via email: attydequit@hotmail.com
and visit the TSG webpage: http://www.tsgsubic.com/privatization.html
Outsource
Development of Tourism Marketing Strategy & Campaign. The Services Group
(TSG) has been assisting the Subic Bay Metropolitan Authority (SBMA) to
contract out this portion of tourism promotion activities for the Freeport. A
draft Terms of Reference has been prepared and funding sources are currently
being confirmed so that this outsourcing transaction can be completed by late
2001/early 2002.
The
area encompassed by the Subic Bay Freeport Zone (SBFZ) offers extraordinary
opportunities for tourism, which requires an aggressive tourism marketing campaign
to realize its potential. It is proposed
that the Subic Bay Metropolitan Authority (SBMA) hire consultants to study
what needs to be done and to develop an appropriate marketing campaign, with
the option to carry out elements of the proposed plan under contract.
The
Tourism Department of SBMA reports to the Business Group Deputy Administrator
and is responsible for the Divisions of Conference/Support and Recreation. Most
of the Tourism Department's activities are related to the operation of various tourism
facilities, convening of promotional events and investor briefings, with
limited attention devoted to policy, planning, research or development of
marketing capabilities. A number of studies on different facets of tourism have
been done over the last 5 years and are available for review by interested
parties.
The
natural resources for tourism incorporate the marine (beaches, shipwrecks,
mangrove swamps, boating, diving) and rain forest environments (Aeta native
peoples, hiking, bird and fruit bat observing). Manmade resources include
duty-free shopping, convention center, golf course, tennis courts, equestrian
center, yacht club, pools, restaurants). Accommodations include hotels, rental
units and camping, all within a clean, secure, gated base. New facilities and
opportunities encompass a marine mammal theme park (Ocean Adventure), rain
forest aerial tram, new convention center, new sports complex, waterfront
boardwalk, and so on.
Though
the list of attractions is long and diverse, they are underdeveloped or not
developed at all. Most of the visitors are low-income and low-impact in nature,
the trend of which needs to be redirected to embrace higher-income segments of
the population. Holding back advances are a number of factors, not the least of
which are restrictions on duty-free privileges, uncoordinated and ineffective
promotion and marketing, inadequate transportation access (land, sea and air),
and institutional limitations. Cost is not a serious impediment as prices in
the SBFZ are relatively modest by international standards.
The
consultants may be tasked, among other things, to assist SBMA to convene a Tourism
Advisory Council composed of SBMA and private sector tourism investors and
operators; to review and update prior tourism studies; to produce a tourism
marketing and promotion plan; to design marketing materials (brochures, video,
website) encompassing a theme and logo; to design an internet-based database of
accommodations with an on-line reservation system; to specify new attractions
and facilities or needed upgrades; and to develop a system to gather and
analyze tourism-related statistics and information in an electronic database.
They also may be asked to propose a project to implement some or all of their
recommendations under contract to SBMA, either by themselves or in joint
venture with others.
The
SBMA will issue a call for tenders to tourism consultants to bid on the
above-summarized tourism project, including both the study and certain
implementation phases. For further information on the relevant tender process,
please contact the SBMA Privatization and Commercialization Office (PCO) via
email: attydequit@hotmail.com and
visit the TSG webpage: http://www.tsgsubic.com/privatization.html
WB184698
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April 27, 2001 9:26 AM