MAKATI CITY Philippines ""International Container Terminal Service Inc. officials visited Guam from the Philippines the week of March 27 to continue negotiations with the Port Authority of Guam.
ICTSI officials will also be returning to Guam in April for further discussions.
Neither of the two organizations released announcements of progress on privatization negotiations after the March meetings but the port did confirm to the Journal that the meetings took place and that further meetings have been set.
Michael P. Henderson marketing communications administrator for the port told the Journal "The next meetings are scheduled for next month [April]. ICTSI officials will be coming back for another round of discussions."
The other two bidders remain interested in the privatization of Guam’s port.
March 31 was the nine-month deadline that accompanied the three bids guaranteeing terms and conditions of the three bids would be upheld for that period.
Henderson said as that administrative deadline approached the three companies were asked if they wished to reconfirm the terms.
"All offerers were contacted and they agreed to extend " he said.
Other bidders were SSAT a joint venture between SSA Marine and Matson Navigation Co. and Singapore-based Portek International Ltd. As the Journal first revealed thirteen companies originally expressed interest in the mandatory bid conference held from May 2 to 4 2005
Gov. Felix P. Camacho of Guam expressed dissatisfaction at the apparent slow pace of negotiations between the port and the Philippines’ International Container Terminal Services Inc.
In an interview with the Journal Camacho said he met with port officials prior to his trip to the Philippines March 15 through 7 to press the immediate resolutions of the issues bogging down the deal.
"I’ve spoken to the [PAG] board chair and also the manager just yesterday [March 14] and I told them the timeline is unacceptable " he said.
He said that the port claimed that it is only waiting for "information on stockholders which is a requirement of the local procurement law. We also understand that the numbers have changed as the Port Authority has submitted different numbers on employment cost it has affected the overall offer [of ICTSI]."
Regarding the provision of a list of shareholders Nana Soriano spokeswoman for ICTSI said "We are complying with the requirements as best we can." She declined to comment on the rest of the issues said to be delaying the approval of the deal.
If the deal is approved this will be the first foray of the ICTSI into the U.S. The transaction comes at a time when issues have been raised by the U.S. Congress on the privatization of American ports by foreign entities. Congressmen took the Bush administration to task for approving the takeover of the Dubai Ports World of 24 of 829 container terminals in six American ports. The terminals were acquired by DPW when it bought the London-based Peninsular and Oriental Steam Navigation Co. DPW has since decided to sell its US port assets including those in New York and Baltimore to an as yet unnamed American firm to end its row with the U.S. Congress.
According to the terms of the privatization plan for the Jose D. Leon Guerrero Commercial Port the port should have chosen the winning bidder July 1 2005 with the contract approved by September 2005. After this the contract will be submitted to the Guam legislature which has 60 days to study and approve it.
Bids were opened last June and ICTSI was chosen "preferred offeror" in December out of the three that responded to the bidding.
While he could not provide further details Camacho mentioned other possible issues delaying the approval of ICTSI’s bid: "The cost of employment the benefits that are involved the taxes that are required the 4% GRT [gross receipts tax]; the details I understand are under negotiation. The Port Authority told me they’re awaiting documentation on the stockholders understanding it’s a publicly traded corporation here [in Manila]. And that kind of info versus the U.S. is quite different. Maybe these are things they’re working on."
Under Philippine stock trading rules stock brokerage firms and other institutional investors are allowed to hold the shares of a publicly-traded company on behalf of individuals. As such the names of individual stockholders may not be necessarily available.
If ICTSI needs to submit a complete list of its shareholders it will have to write a request to the Philippine Central Depository Inc. a unit under the Philippine Securities and Exchange Commission. The PCD serves as a registration of owners of stocks traded in the market but even the list of stockholders will provide will be as of a certain cut-off trading date. Because the shares are traded daily the names of the actual owners of the stocks may change as well.
Asked whether the Guam port officials made any assurances when they would approve the ICTSI contract Camacho said "No. None whatsoever understanding that once they come to an agreement and the document is presented to our legislature which must act within 60 days to approve it."
"As governor I am going to encourage them to come to the table and very quickly to sit and talk " he said.
ICTSI is one of the most aggressive Philippine companies both in Philippines and internationally.
Last year it earned a net income of 1.34 billion pesos ($21.26 million) after adopting accounting standards set by the Philippine Accounting Standards /Philippine Financial Reporting Standards. This reduced the company’s consolidated net income by some 51 million pesos ($998 000) from 1.39 billion pesos ($27.2 million). Last year’s net income was 17.5% higher than the restated figure for 2004 of 1.14 billion pesos ($22.3 million).
In a press statement issued by the company the week of March 20 the profit stemmed from the continued strong performance of its international assets. Foreign operations contributed 34% to last year’s income against the 27% in 2004.
Enrique K. Razon chairman and chief executive said "ICTSI has delivered a record year. I am particularly pleased by the solid results at our international units. The addition off three international terminals to our portfolio over the last four years all of which are now profitable is an impressive achievement in today’s highly competitive environment. Volume growth in Manila during the second half of 2005 was disappointing."
ICTSI operates the Baltic Container Terminal in Gydinia Poland; Suape Terminal in Suape Brazil; and the Madagascar International Container Terminal in Toamasina Madagascar. The company in a joint venture with six stevedoring companies also took over the Naha international container terminal in Naha Japan in January. It is also exploring other possible port investments in China and Iraq. MBJ
