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) Concession to operate the power distribution network

2) Disposal of selected real estate for development

3) Outsourcing the collection of solid waste and the operation of landfills

4) Outsourcing 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 SBMA's Power Distribution System, Philippines

 

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

 

 

SBMA Pro-Active Marketing and Land Project Descriptions, Philippines

 

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 aspotential 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

 

 

Privatization of SBMA Tourism Promotion, Philippines

 

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 proposedthat 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

 

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April 27, 2001 9:26 AM