“ I do not know, I hope not.” – Gov. Oca Moreno
“Hanjin kisses Misor project goodbye”
Herbi Gomez and Susan Palmes
The Korean firm Hanjin Heavy Industries and Construction Corp. has decided to withdraw its US$ 2 billion shipyard project from Misamis Oriental due to difficulties in dealing with the government, highly placed sources said yesterday.
A senior Hanjin executive told The Gold Star Daily that the Korean firm started moving out last Saturday. Lawyer Jose Alejandro Pallugna, a columnist of this paper also claimed to have been informed by reliable sources about Hanjin’s decision to back off from Tagoloan and Villanueva towns in Misamis Oriental.
“I do not know, I hope not, “ said Misamis Oriental Gov. Oscar Moreno when this paper asked him about the reported hanjin withdrawal. The last time he checked, Moreno said, Hanjin suspended its operations to assess its Misamis Oriental project. Moreno’s mood had radically changed. Just a few weeks back, the governor was in high spirits because of the Hanjin project that was seen to create 40 thousand jobs in Misamis Oriental. The Misamis Oriental would have been the biggest Hanjin Shipyard outside South Korea and one of the biggest in the world. Moreno said the problem on Hanjin project would be included in the agenda of President here today. Moreno said there were “events” that made things complicated for Hanjin. Sources said a confluence of factors resulted in the Hanjin decision to back off. The bottomline: the locals made it difficult for the Koreans to invest in the province.
They cited some of Hanjin’s reasons for the withdrawal: failure to secure an environmental compliance certificate from the environment department, relocation problems, a disagreement with the state run National Power Corporation over billing conditions, landownership issues and alleged moves in the Senate to summon Hanjin’s top executives due to environmental concerns.
A Hanjin official said they received an ECC from the environment department yesterday morning days after the firm started moving out. But he said the EC did not make any difference because a decision has already been made. He said some of Hanjin’s executives left for good yesterday. “I brought them to {Lumbia} airport,” said the executive.
On local television earlier Moreno hinted that Hanjin officials experience4d “hardships” and decided to defer the implementation of the US$ 2 billion shipyard project until they could comply with all the requirements of the government. He said the situation was volatile. But an alleged act of aggression last weekend may have been the last straw that broke the camel’s back. “Things have changed after Saturday’s incident,” said Moreno.
Moreno said a driver of Hanjin was barred from the construction site and was attacked by an unidentified man on Saturday. He said a former official of Tagoloan town then seized the hanjin workers’s identification card and camera. The same day, Hanjin started moving out, according to sources. Moreno said he feared Misamis Oriental would lose the project which he called “a strategic investment” with long term effects.
“Its effects on employment would be felt even by the next generation…long after us,”
he said.
Hanjin planned to operate a shipyard that would extend from Tagoloan to Villanueva. Its training center alone would occupy eight hectares; the planned shipyard would be on a 70-hectare property in Tagoloan and on a 400-hectare property in Villanueva.
April 30, 2008 at 11:56 pm
Too much politics is bad for business..
They are killing the hen that lays the golden egg.
May 1, 2008 at 10:41 am
I wouldn’t say it’s entirely the government’s fault — Hanjin is a company that has recently had its hand dirtied over its Subic project’s construction of a residential facility prior to obtaining an ECC. Top that with a global economic crisis (I’m sure the Napocor dispute is happening because of the surging price of oil, for example) and the absence of the usual local politicking would probably not have made a difference.
However, it remains a fact that Filipinos are really, really good at destroying their chances of being good at anything before they even start.
May 1, 2008 at 10:50 pm
Hanjin is a big company and surely understood the requirements or the critical considerations of an investment. They’ve started, somebody should have given them the GO. Obviously, they are foreigners and will surely not just invade a place and start a project construction without any go signal from top officials. To this I can say that mishandling by goverment most probably is the reason of backing off.
I’m not sure if it’s true, but I heard that even the boarding house of the contractors are brokered by top local government officials of villanueva. The first personnels hired by Hanjin and sent to subic for training to become trainors were also being politicized as most of them are “men” of local officials…
I am working in Villanueva and I’m very sad of this development.. very discuoraging.
This is a shocking event illustrates why our country is very poor..
Filipinos are skilled but never good at governance…
Crocodiles in rivers has evovled. They are now leaving in the land.
May 2, 2008 at 12:28 am
We still dont know the real score. But I guess both Hanjin and the local government officials are to be blamed. The local officials if they politicized the project and Hanjin for its spoiled brat attitude in leaving the project without even consulting ther provincial government of Misamis Oriental.
Hanjin has a bad record in safety and this was evident in the number of fatal accidents that happened in its Subic shipyard. When they leave the project, it seems they are treating the local government hostage.
June 20, 2008 at 3:27 pm
Driving away big investors
Jose C. Sison
Philippine Star
Vigilance is truly necessary nowadays because of the rampant graft and corrupt practices committed in just about any deal or project where the government has a say one way or the other. The prevailing presumption is that in any multi-million peso/ dollar undertaking, dirty money changes hands; that government officials and/or powerful, influential persons are on the take. This mindset is caused by the administration itself because of the many perceived anomalies that have remained unresolved due to cover up attempts.
Unfortunately however this vigilance has sometimes been abused and converted into a political tool by the opposition especially in the legislative branch. The political opposition has acquired a predilection to investigate and always smells something fishy in any big ticket projects. The impression readily formed in the public mind is that they just also want to have a slice of the delicious pie.
This is so noticeable in the ongoing ruckus surrounding the ship building projects of the Korean firm Hanjin Heavy Industries and Construction Co. Inc. (HHIC) in Subic, Zambales and Misamis Oriental.
Actually Hanjin has been doing development projects here since 1973. The press has not just focused on its company background. Hanjin then was known as Hanil Development Corporation. The company changed its name from Hanil to Hanjin only in 1994. This is the same company that has successfully completed numerous development projects in our country tremendously benefiting us now. In fact “Hanil” always rings a bell to me as the only foreign contractor that dared to operate in rebel infested areas and risking their valuable equipments thereby contributing to the significant country side economic development so vital in solving peace and order problems.
In Misamis Oriental itself where the company is now putting up a shipbuilding facility, it constructed the Iligan-Cagayan-Butuan Road in 1973 during those dangerous times of insurgency in Mindanao. Today that road is still cited as one of the country’s best highways. It is also the same company that successfully completed the Manila LRT (Light Rail Transit) Line 2 System, the Batangas Container Terminal and the Manila North Harbor Development.
The goodwill and reputation it has established here with the considerable number of development projects it has successfully completed somehow raise doubts on the veracity and accuracy of the anomalies that it is now being accused of. The company cannot simply afford to risk its reputation by committing the alleged wrong doings attributed to it. The charges seem to have been blown out of proportion and given so much media hype so attractive to grandstanding Senators.
Of course if Hanjin has transgressed our laws, it should be investigated and held liable. But what is happening now is that because of too much publicity, the company has already been pictured as involved in a bribery/extortion on the construction of the shipbuilding facility Mindanao and in an environmental degradation for building its employees’ housing facilities allegedly in the heart of a dense forest in Subic.
Thus a mere meeting between Hanjin’s Project Manager and the Tagoloan and Villanueva Town Mayors in Mindanao has immediately been interpreted as an attempt to bribe the said town officials with a P400 million contract. What transpired in the meeting actually concerns the possibility of hiring local contractors in the hauling of aggregates on a competitive basis so as to help said contractors generate business. In fact the PNP has declared the matter closed with the submission of sworn statement by the parties involved that neither bribery nor extortion happened. In any case, this issue is better left for resolution by the prosecution and the courts rather than by the Senate especially because of the attendant publicity being generated.
On the other hand numerous articles have been published in various newspapers about the alleged irregularities in the construction of the apartment site of its employees in a forest area in Subic allegedly containing about three hundred or more trees. But as it turns out the site is more or less located in the same area previously used by the US Navy as an ammunition depot and later used as a depot or factory by two other locators. Without verifying first that only about 43 trees were cut, reckless accusations and finger pointing are already made.
Critics have also tried to harp on the premature start of the apartment construction before securing the DENR Environmental Clearance Certificate. They did not first find out that Hanjin’s investment in SBMA could not have been finalized without first providing accommodations to the Koreans who would supervise and train Filipino workers thereby prompting SBMA to give the go signal taking into consideration that the area was anyway already used by the US Navy and two other locators.
The point here is that if ever there are short cuts done or irregularities committed then let them be rectified to assure that our laws are complied with and our environment duly protected. But these steps can be done without too much publicity that may eventually result in driving away big time investors like Hanjin.
In building the Subic Shipyard facilities alone, Hanjin’s initial investment for Phases I and 2 amounts to US$1.6 billion. The shipyard has a capacity of 80,000 tons/year up to 550,000 tons capable of building large-scale vessels such as 12,000 TEU Container such that by year 2017 its sales would reach US$3.9 billion generating employment of about 30,000 at its peak.
The Mindanao shipbuilding facility on the other hand will generate income and employment also for 30,000 workers. Hanjin will most likely spend P4.6 billion a year during peak time. Labor constitutes 40% of shipbuilding cost that goes directly to the workers’ pockets. With the US$60 million price tag on the first vessel for example, around $24 million or P984 million would go to workers salaries. The lives of the people in Northern Mindanao would surely improve especially considering that said shipbuilding facility would generate more business and tourism.
Indeed the construction of these shipyards would put the Philippines on the list of countries with the largest facilities after Korea, Japan and China. The world will thus be taking notice of the Philippines as an investment option.
Let us not squander these opportunities by engaging again in politics and resorting to those useless and grandstanding investigations “in aid of legislation” that may drive away big time investors like Hanjin that has reportedly been repeatedly cited as the World’s Outstanding Shipbuilder.
June 20, 2008 at 3:28 pm
Hi Balatucan,You should research more before you write something…