B 2


BY DARWIN G. AMOJELAR SENIOR REPORTER


business The Manila Times TUESDAY August 10, 2010


LRT 1 privatization proposal in the works T


HE Department of Transportation and Communications (DOTC) said it is drafting a privatization plan


for the Philippines’ first overhead light rail system.


“There are two firms that ap- proached us. They asked if there is any way they can possibly help. So, we told them we will hand in our concept paper of privatization to them,” DOTC Undersecretary Glicerio Sican said.


Sicat said the two firms interested in buying the Light Rail Transit Line 1 (LRT 1) were from the property sector. “We will do the concept paper. We will probably hire a consultant to do it for us. After which we will present the paper to interested investors,” he said. Earlier, Ecorail Transport Services Inc. proposed to manage, operate and maintain the entire LRT 1, in- cluding the existing north extension and the proposed south extension. The company is owned by Reghis


Romero 2nd.


The LRT 1 runs from Baclaran in Pasay City to Monumento in


Caloocan City, while the LRT North Extension runs from Monumento to North Avenue in Quezon City. Ecorail and its foreign partner


China Railways 18th Bureau Group Corp. also proposed the construc- tion of the LRT 1 South Extension Project for P56.557 billion. China Railways is a contractor of


railway, road, water conservancy and hydropower, municipal and public construction.


Ecorail proposed to construct the LRT South Extension under a joint venture scheme.


The South Extension Project would extend the existing 15-kilometer LRT 1 by an additional 16 kilometers from Baclaran to Imus, Cavite with nine dedicated railway stations and four inter-modal stations.


The stations would be built along the Redemptorist Road, Ma-


Potential buyers keen on Tindalo field’s oil output


AUSTRALIA’S Nido Petroleum Ltd. said that oil from the Tinadalo field has received positive response from refiners across Asia.


In a regulatory filing, Nido said that sample crude from the Tindalo field has been sent to refineries in the Philippines, South Korea, Japan, Singapore and Thailand following a number of requests. “The final assay results have been


received and the marketing agent indicates that the crude should trade well against regional and Middle East crudes,” the company said. The Tindalo field is located in Serv- ice Contract (SC) 54A, which is run by the consortium composed of Nido, Kairiki Energy Ltd., Trafigura Ventures III B.V. and TG World (BVI) Corp. Production from the field started


in May with likely recoverable reserves placed at 11 million barrels at a rate of 7,000 to 15,000 barrels a day. As of August, Tindalo had pro- duced 165,000 barrels of oil at a limited output of 1,700 barrels of oil a day as the consortium is still conducting well testing on the field. “The production processing sys-


tem at Tindalo is currently operat- ing at sub-optimal efficiency, par- ticularly with respect to water sepa- ration and treatment. Initial sepa- rator design and the current high water cuts (currently 80 percent +) at Tindalo have contributed to this,” Nido said. To reduce water churned out of the Tindalo well, the SC 54 consor- tium plans to undertake a work over program on the field.


The Philippines is a net importer of oil, making local pump prices susceptible to price fluctuations in the international market.


Domestic production of oil, in particular, stood at around 13 per- cent of demand, based on industry data. The high end of the Nido range is roughly equivalent to 5 percent of local demand placed at about 320,000 barrels a day.


Aside from Tindalo, Nido targets to drill a chain of oil fields of “mod- est size” and “low risk” within the SC 54A exploration block, which it aims to aggregate into a single pro- duction facility to optimize value. EUAN PAULO C. AÑONUEVO


SSS disputes lender’s report on social protection


STATE-RUN Social Security System (SSS) on Monday disputed a study that showed the Philippines ranking 22nd among 31 Asia-Pacific countries in terms of social protection. In the report dubbed as “Scaling Up the Social Protection Index for Committed Poverty Reduction,” the Asian Development Bank (ADB) said the Philippines registered an over- all social protection index (SPI) value of 0.18, lower than the 0.36 All-Asia average. The social protection report was defined by the ADB as the set of policies and programs designed to reduce poverty and vulnerability, and comprise five major compo- nents, including labor markets, social insurance, social assistance and welfare, micro and area-based programs, and child protection. According to the report, the


country’s total expenditure on social protection in 2004 to 2005 was around P116.6 billion, equivalent to about 2.2 percent of the Philippines’ gross domestic product (GDP). GDP measures the amount of final goods and services produced in the country. The ADB report also noted that 80


percent of the Philippine expenditrues was on social insurance, which includes pensions and health coverage. Horacio Templo, SSS chief actuary


and executive vice-president, however said that the ABD figure was actually “understated,” noting that the expenditures of the social insurance companies and other government agencies was more than three times that quoted in the report. “Based on our assessment, social insurance alone, which includes SSS,


PhilHealth and [Government Service Insurance System] expenditures were already more than the P116.6 billion reported by the ADB. Overall, social protection spending by the government could be more than triple the amount said in the report,” Templo said. The official also said that the ADB


report has no one-on-one corre- spondence with the social protection operational framework being used by the Philippines. “With the way the ranking is done,


naturally our ratio is much lower than the set standards. We have to question the way it was computed,” the SSS official said. Templo said the ADB excluded


government subsidies, as well as the conditional cash transfer and school- feeding programs, which could raise total expenditures for social protec- tion. “They just based our ranking on our [GDP] and human development index [HDI],” he said. Based on the report, the difference in ranking implies that the social protection in the Philippines is lower than one might expect from its levels of human development and wealth. The country is ranked 9th and 13th in HDI and GDP, respectively. Templo admitted that the social


protection in the country was beset by problems of insufficient and inad- equate targeting, and lack of coordina- tion among government agencies. “We should be more conscious in the components of social protection programs of the government. Clarify the social policy of this administra- tion and give more focus on the main contributors,” he said. JAMES KONSTANTIN GALVEZ


nila International Airport Author- ity (MIAA), Asiaworld, Ninoy Aquino International Airport (NAIA), Sucat, Manuyo Uno, Las Piñas, Zapote, Talaba, Niog,


Bacoor, Aguinaldo and Imus. Ecorail plans to construct the project in four years and start op- erations on the fifth year. Ecorail will charge an average fare


of P20.98 per passenger staring on years two and three and increase it to P26 per passenger at the start of year four onwards.


The consortium proposes to pay


state-run Light Rail Transit Author- ity 3 percent of gross rail revenues, or P27.3 billion in 40 years, and 8 percent of gross non-rail revenues or P7.5 billion.


ATI to focus on port operations after sale of grain depot


ASIAN Terminals Inc. (ATI) on Monday said it will focus on expanding its port operations after the sale of its grain terminal in Bataan. In a disclosure to the Philippine


Stock Exchange, ATI said it has concluded the sale of all its shares in the outstanding capital stock of Mariveles Grain Corp. (MGC) to Philippine Grain International Corp. The port operator said its shares


in Mariveles were sold at a price in excess of ATI’s recorded book value


for such shares. At end-2009, MGC’s assets make up


16.5 percent of ATI’s total assets of P8 billion, which were 7.4 percent higher than in 2008. MGC stopped commercial opera- tions last year. The grain terminal can accommo-


date vessels of up to 70,000 deadweight tons, discharge cargo at 10,000 metric tons a day and store 180,000 metric tons of both soy-bean meal and grain cargoes.


“Following the sale, ATI expects


to focus on expanding and upgrad- ing its other businesses and growing its ability to generate revenue from new and existing port operations,” ATI said. Eusebio Tanco, ATI chairman had


said that the proceeds of the sale will be used for the development of Batangas Port. The company earlier secured an


authority from Philippine Ports Authority to operate the Batangas


Mechanical engineers’ group to sue companies that don’t hire professionals


A GROUP of mechanical engineers may file charges against firms that fail to adhere to a law requiring employment of professionals in machine-intensive projects. In a briefing last week, Antonio Camelo Tompar, Philippine Society of Mechanical Engineers (PSME) vice president for internal affairs, said only less than 10 percent of compa- nies nationwide comply with Repub- lic Act (RA) 8495, or the Philippine Mechanical Engineering Act of 1998. Section 34 of RA 8495 states that all mechanical work or projects must have resident licensed professional mechani-


cal engineer/s, mechanical engineer/s, or certified plant mechanic/s. “Inherently, mechanical equipment are hazardous, so only mechanical engineering professionals should op- erate and oversee them,” Tompar said. Most companies however do not


employ mechanical engineering professionals to manage the various mechanical processes being done, adding that some only hire techni- cians or unlicensed mechanics. Tompar said the PSME recently formed a paralegal group that would embark on an information drive about RA 8495. “Some companies do not


know that there is such a law,” he said. Also, the paralegal group would soon go after erring firms, he said. Under RA 8495, violators will be pe- nalized between P50,000 and P200,000 or imprisonment of between six months and three years, or both. Renato Florencio, PSME presi- dent, said the enforcement of RA 8495 is one of the issues that would be discussed during the group’s upcoming 58th annual convention, which will be held on October 13 to 16 at the Philippine International Convention Center.


BEN ARNOLD O. DE VERA RLC launches new residential project


THE property arm of the Gokongwei group expects to generate P1.2 bil- lion in revenues from its latest resi- dential project in Parañaque City. Robinsons Land Corp. (RLC) is beefing up its presence in the South with the launch of Woodsville Resi- dences, a 3-hectare townhouse de- velopment within the 9-hectare mixed-use Woodsville City complex in Merville, Parañaque City. Phase 1 of Woodsville Residences,


a follow up to the mid-rise residen- tial condominium Woodsville Man- sions, will offer 116 units, featuring five townhouse models that cost from P5.2 million to P6.6 million. Construction is set to start within the year and turnover of units is ex-


■ PAL FROM B1 Management offer fails to break impasse at PAL


Airlines Employees Association (PALEA) members, which groups the carrier’s ground personnel. “To address the minimum wage distortion, it will take almost the en- tire amount . . . and the P20 mil- lion for the salary increases for three years,” Ortega said.


The total back pay for the FASAP mebers will cost around P160 mil- lion, he said.


The group earlier threatened a strike after PAL management’s fail- ure to raise their salary for more than three years, as well as its de- cision to lower the compulsory re- tirement age. For the years 2007 and 2008, PAL


gave pay increases to members of management, the pilots and other


ground personnel, except for the flight attendants. PAL lost almost $320 million or


over P15 billion in the last two fis- cal years due to the global eco- nomic crisis coupled with spikes in fuel prices, the downgrade of the Philippines’ aviation safety rat- ing to Category 2 by the US Fed- eral Aviation Administration (FAA), and the European blacklist of all Philippine carriers. “We hope FASAP members will understand PAL’s predicament and accept the offer. While we recog- nize their desire for higher com- pensation, PAL’s current financial situation will not allow it offer more,” Bautista said. He said management would also


move discussions on the retirement age issue for the 2010 to 2015 CBA, adding that the priority is to put a clo- sure to the previous CBA which has dragged on for the past three years. Bautista said there is more than enough time to discuss the retire- ment age provisions and issues. He said a 22-year-old flight at- tendant who was hired by PAL in the year 2000 will only turn 40 in 2018, while those who were 22 when hired by PAL in 1996, will only turn 45 by 2019.


Under the existing CBA, male and female flight attendants who were hired before November 1996 would be retired once they reach 60 and 55 years old, respectively. Those hired from 1996 and beyond


would be retired at age 45 for both males and females. Hires made after November 2000


would be retired by the age of 40 for both males and females. As a sign of good faith, Bautista


said PAL management is willing to conduct marathon meetings with FASAP for the 2010 to 2015 CBA. “The immediate goal now is to put closure to the 2005 to 2010 CBA, which has become a major source of misunderstanding between man- agement and FASAP,” he said. The labor strife involving flight at- tendants comes at a time when PAL has yet to resolve a separate issue in- volving the premature resignation of 26 pilots who have opted for jobs in foreign carriers.


pected to begin by September 2013. “Woodsville Residence is perfect for those young, second-generation families living in suburban areas like San Pablo, Calamba, and other nearby areas in Laguna and Cavite who are wishing to upgrade their residences without leaving the south,” Mybelle Aragon-Gobio, RLC vice president for business develop- ment, said in a briefing. Gobio said Parañaque remains another attractive location for resi- dential projects because of its prox- imity to business districts Makati and Bonifacio Global City. Just a 10-minute drive to Makati,


Woodsville Residences is near com- mercial establishments such as the


Robinsons Woodville mall and SM Bicutan and is accessible through the West Service Road and the South Luzon Expressway.


Gobio said RLC is expected to de-


velop more townhouse projects if the real estate firm acquires another rea- sonably priced land. The property was acquired from property devel- oper Jardine Land five years ago. “It’s nice to do this type of devel- opment because we recognize rev- enues earlier. But we can only do these projects when opportunities are present because land is very ex- pensive,” she said.


RLC shares rose from P14.66 on


Friday to P14.68 each on Monday. KRISTA ANGELA M. MONTEALEGRE


Port Phase 2, which has a 128-hectare container terminal area, or bigger than the 20-hectare first phase operated by the same company for domestic traffic. The second phase would be a mix


operation of bulk, break bulk and international containerized cargo. The facility could accommodate 7,000


TEUs (twenty-foot equivalent units). The port operator also runs the passenger terminal of the Batangas Port. DARWIN G. AMOJELAR


ABS-CBN claims hike in TV rating


ABS-CBN Broadcasting Corp. on Monday said its national audience share in July rose by nearly two digits because of its “santaserye” programs. In a statement, the Lopez-led net-


work said national TV ratings went up by 9.4 points to 42.6 percent compared with leading rival GMA Network Inc.’s 33.2 percent. ABS-CBN’s ratings data was based on


Kantar Media, a global market research group that offers audience research measurement systems in 32 countries. Programs like Agua Bendita and


Noah drove ABS-CBN’s national TV ratings in July. ABS-CBN was the first to launch


the “santaserye” format with May Bukas Pa last year. GMA Network had said its July


average TV ratings in Mega Manila rose by 5.6 points to 37.5 percent, outpacing ABS-CBN’s 31.9 percent. Other top rating programs of ABS-


CBN were Kung Tayo’y Magkakalayo, TV Patrol, Maalaala Mo Kaya, Goin Bulilit, Agimat, Magkaribal, Rated K and Momay.


In the first three months, ABS- CBN posted a net income of P1.09 billion, or 468 percent higher than the P194 million in the same three- month period last year.


Its consolidated revenues reached P7.75 billion from advertising and consumer sales, 47 percent higher year-on-year. DARWIN G. AMOJELAR


■ Father and son and other mostly- indigent passengers take advantage of free rides in the Light Rail Transit Line 2, the third overhead mass railway that began operations in 2005. FILE PHOTO


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