POSTSCRIPT / June 3, 2010 / Thursday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Unfair to burden Noy with GMA appointees

CONTINUING POWER: A talking head in Malacanang says that President Arroyo’s last-minute appointments in the Executive Department can only be reviewed by incoming president Noynoy Aquino but cannot be revoked or overturned by him.

One does not have to be a legal luminary to know that that assertion of the Palace spokesman is preposterous.

Of what use is a review of midnight appointments if the president, after such a review, is barred from taking back an appointment that he has found to be defective or outright illegal?

The appointing power is not Gloria Arroyo but the president — who in less than a month will be Noynoy Aquino exercising the continuing power (and duty) of the Chief Executive to correct errors of judgment in his department.

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TEMPTING NOYNOY: It is absurd to have a Chief Executive who is helpless in correcting administrative errors – such as the hurried reappointment of Arroyo crony Efraim Genuino as Philippine Amusement and Gaming Corp. chairman.

While she talks of wanting a smooth transition, President Arroyo’s underlings make her appear as a liar by inflicting on the incoming Aquino administration an overload of midnight appointees of dubious reputation.

While she can still redeem herself, Ms Arroyo should acknowledge that there have been some unfortunate mistakes in the rush of paperwork — and then revoke ill-advised appointments.

As for incoming President Aquino, he should steel himself against tempting suggestions that Genuino could be useful because he has mastered the art of skimming or raising tons of money for him or his administration.

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PLAYING HARDBALL: The Palace spokesman said the midnight appointments cannot be revoked or overturned because they are aboveboard and legal.

It is presumptuous of this Malacanang factotum to pass judgment as to the legality of presidential acts. If he has judicial pretensions, he may beg President Arroyo to sign another antedated appointment making him a municipal judge somewhere.

Note that the next president can just as facilely say that he found Genuino’s reappointment legally flawed and recall it. Then, Pagcor’s chief money-maker and others similarly situated can go to court.

If Genuino prefers to play hardball, he can be ordered by Aquino to stay in the casino cage counting gambling chips and writing a daily report on it. When he grows tired doing that, he can always resign and return to the Rotary Club.

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REJOINDER: Reacting to our Postscript on the plan of the Subic Bay Metropolitan Authority to tap a private partner in modernizing the freeport zone, the president of a cargo handling firm talked disparagingly of SBMA’s projected partner.

Mario Lorenzo Yapjoco, president of Amerasia International Terminal Services, asked if SBMA has found in Harbour Centre Port Terminal Inc. a joint-venture partner with credibility and integrity or is being taken for a ride.

He said that existing cargo handlers stand to lose their investments and contractual rights to operate in Subic ports and wharves that, he claimed, they have developed for years. (HCPTI has said their contracts will be respected although they have neglected port upgrading.)

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NOT QUALIFIED?: Yapjoco said that HCPTI is not a world-class operator and is “not even qualified… to undertake, aside from the exclusive management and operation of the ports and wharves, a multi-billion development plan.”

He said HCPTI has not met the technical qualifications of the National Economic and Development Authority for a private sector joint-venture partner as “it has not even completed a similar or related project in the past.”

Although most of its concession rights involve cargo handling, he added, “Harbour Centre only hires subcontractors to perform its cargo handling activities as it has neither manpower nor equipment to handle cargo.”

He said HCPTI has not completed a similar or related project which, per the 2008 NEDA guidelines, should cost at least 50 percent of the joint-venture project, or P3.27 billion in the case of the P6.54-billion approved SBMA-HCPTI contract.”

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FINANCING RULE: Yapjoco said the total net income for five years of HCPTI is only P700 million, while its paid-up capital is P2 billion.

“Assuming the veracity of this financial info taken from their joint-venture agreement,” he added, “how can it complete a multibillion-peso project with only a combined income of P700 million in its five years of operations?”

He said HCPTI failed to meet the financial qualifications set by NEDA rules that 50 percent of the equity to be provided by the private contractor should as much as possible come from its own resources and not borrowed.

Yapjoco said HCPTI plans to get a loan as it can provide only 22.3-percent equity share or P1.46 billion in the total cost of the joint venture. It needs more than five years to save its yearly income to come up with the needed equity share, he added.

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BOTTOM LINE: It appears, though, that after all is said and done, no one party – including Amerasia — has come forward to match or improve on the commitment of HCPTI in its unsolicited proposal.

HCPTI has committed to produce a volume of 1.5 million metric tons with a guaranteed fixed fee of $500,000 to $1.5 million per year; to invest a minimum of $120 million for modernizing facilities and services; and to earn for SBMA an income of $32 million in 25 years from wharfage, cargo handling fees and tariff.

Meanwhile, SBMA needs badly a big-time investor to generate enough income to meet its mounting loan and other financial obligations.

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(First published in the Philippine STAR of June 3, 2010)

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