POSTSCRIPT / July 7, 2011 / Thursday


Philippine STAR Columnist

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Noy can step into HLI dispute to lift tenants

EVASIVE RULING: The Supreme Court shirked its duty when it threw back to the tenants of Hacienda Luisita the question of whether they should get a parcel of the sugar estate or just accept shares of stock in the corporation managing it.

The parties to the land dispute that had seen bloodshed were in court precisely to find the answer to the legal question.

The law is clear enough to most people, including Chief Justice Renato Corona – that the tenants in agrarian reform areas be given their just share of the land – but the Court avoided handing down a clear-cut ruling.

Instead, it ordered the Aquino administration, through the Department of Agrarian Reform, to ask again the 6,000 or so farmers in a referendum to choose between shares of stock or shares of the land.

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BETTER DEAL: A referendum conducted by the administration could be problematic since the 4,915-hectare Hacienda Luisita is controlled and operated by the clan of President Noynoy Aquino.

The outcome of the referendum – like the management-sponsored surveys before on the same two options — will be in question.

Besides, either way the poll goes, the results will not necessarily produce a better deal for the farmers — unless both the government and the Cojuangco-Aquino clan put in place a program infused with the true spirit of agrarian reform.

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CORPORATE TRAP: What is the real value of a share of Luisita stock? Assuming the HLI board declares dividends, how much will a share earn? Will there be guaranteed profit-sharing of another kind?

Since the tenants have day-to-day needs, how can allowances (if any) and dividends sustain them without their falling into the hands of loan sharks? How about the education of their children and health needs?

What are the safeguards against the tenants’ share being watered down eventually? Will the beneficiaries’ shares have a guaranteed equivalent number of board seats?

What will protect the beneficiaries from the traps of a corporate maze?

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INTEGRATION: Opting for a parcel of land is just as fraught with uncertainties for the tenants — without the earnest assistance of the government and the original Luisita owners.

If the hacienda is broken up into small family parcels, the recipients are likely to lose economy of scale if there is no organized effort to modernize methods and integrate production and marketing.

After a tenant receives a farm to till, the follow-through is crucial to making agrarian reform truly rewarding for his family.

The government must organize and educate the farmers, bring in modern methods and throw in the entire array of farm inputs for optimum production and profitable marketing.

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NICHE IN HISTORY: With the Luisita case, President Aquino is standing on a stage where he could be projected as the nation’s most socially enlightened president ever.

If he makes the right decisions and moves quickly, Noynoy can claim a coveted niche in history that had eluded his father Ninoy in death and his mother Cory in life.

Whichever way the tenants go – stock or land – he could establish a template program transforming the family heirloom of an hacienda into a Model Agrarian Reform Area for the entire world to emulate.

He can cut through the legalistic and bureaucratic jungle and marshal government resources to transform Luisita tenants – whether new landowners or stockholders – into a new breed of Filipino farmers enjoying his enlightened brand of agrarian reform.

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LOW BID, HIGH COST: The Philippine Ports Authority claims it can build RoRo (roll on-roll off) ports in the P40-50 million range, using local contractors paid with domestically sourced funding. This effectively tells other comers that they need not apply.

It sounds good on paper, but scratch the surface and a culture of incompetence, deliberate or otherwise, emerges.

A review of PPA contracts awarded in the past two years reveals an inordinate number of “Port Improvement Projects” that give away the trick.

What is the point of awarding a low bid, only to spend an equivalent amount for “improvement” way before the 40-year life of the concrete port is up? Should not plans include some planning to anticipate conditions in say, five or 10 years?

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DELIBERATE?: Is this deliberate, considering that with a new “Port Improvement Project,” there is a chance for some creative juggling?

If this lack of forward planning is accidental, then it shows incompetence. If it is deliberate, it shows malice. Either way, the country pays.

The average cost of the first six Port Improvement Projects is P33.8 million. This add-on cost is not factored into the original financial viability projections. Adding the P181 million allocated for Cagayan de Oro modernization, for instance, the average shoots up to P55 million.

This constitutes a massive hidden charge, debunking PPA’s original claim of P40-50 million.

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HEAVY BURDEN: Paid to local contractors, which is to say 30 percent down and progress billing, defraying this additional expense wrecks any return on investment projection. It is a very heavy burden on the port business model.

With this burden, any port is hard put to show profitable operations – thereby laying the basis for PPA to claim many of the RoRo ports are underperforming, and that an archipelago of 7,107 islands needs only two new ports.

To recoup increased expenses, ports increase fees to users, many of them medium-scale enterprises shipping bulk goods by sea because it is more cost effective than land transportation.

No wonder It is more expensive to ship goods from Zamboanga to Manila (512 nautical miles), than from Singapore to Manila (1,312 nm), nearly three times the distance.

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(First published in the Philippine STAR of July 7, 2011)

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