From: news@netnews.upenn.edu (USENET News System)
Newsgroups: soc.culture.filipino
Subject: Delays in Subic Base Conversion
Date: 23 Nov 92 17:41:56 GMT
Followup-To: soc.culture.filipino
Organization: University of Pennsylvania


	SUBIC BAY, Philippines (UPI) -- The Philippines hopes to turn the U.S.
Navy's mammoth Subic Bay Naval Base into a free port after the last
American troops pull out Tuesday, but several potential investors say
they're increasingly skeptical about the plan.
	``Given the history of investment in this country, I would advise
people to wait until (a government redevelopment blueprint) gets
published,'' said one shipping analyst familiar with Subic. ``It is best
to just see what happens.''
	To be sure, Subic has big economic potential.
	It boasts billions of dollars in modern infrastructure -- including a
port, air station and ship-repair yard -- and is located in a deep harbor
ideally situated to become a Southeast Asian transshipment hub.
	The government has also kindled interest from Asian, European and
American firms with tax incentives and promises to cut through the red
tape that has strangled other Philippine development projects.
	But delays and other problems have clouded what could be an important
peace dividend for the Philippines, a Pacific nation that will lose 35,
000 direct jobs and nearly 4 percent of its gross national product when
the Americans roll up the flag Tuesday.
	One big problem: investors are still waiting for release of a World
Bank-sponsored plan designed to map out such basic things as which parts
of 15,000-acre base Manila will lease to what kind of industries.
	The plan, originally scheduled for release in September, remains
under review. Augusto Legasto of the Subic Bay Metropolitan Authority,
which is charged with converting the base, recently said he hoped a
final version would come out by mid-December.
	Still, the experience of Singapore-based shipping giant Keppel Corp.
worries some potential investors.
	Months ago, Keppel offered to lease Subic's 74-acre ship-repair yard.
Manila initially reacted favorably, estimating the deal would account
for 20 percent of the $50 million the government hopes to earn annually
from Subic leases.
	But earlier this month, SBMA head Richard Gordon threw a monkey
wrench in the deal when he said the plan would not create enough jobs.
	Subic officials now say they may offer a short-term lease on the
ship-repair facility before transferring operations to state-run yard
sometime in the future.
	But frustrated Keppel officials say they have heard no such word from
the SBMA, nor have they received a formal response to their original
offer.
	``I would say there is no communication,'' said Hoe Eng Hock,
executive vice president of Keppel Philippines Shipyard Inc. ``It is
very difficult to plan or to know what will happen.''
	Critics also say the United States -- which wanted to stay at Subic,
but could not convince the Philippine Senate to extend a new lease -- has
done little to help Manila develop the base.
	World Bank officials say that while the U.S. Navy remains cordial, it
has made minimal efforts to provide specific technical information about
base facilities, thus complicating creation of conversion plans.
	The Navy also did a thorough job in stripping Subic of equipment,
taking everything from three multi-million dollar floating dry docks to
the hardwood floors of the base's bowling ally.
	Still, Subic remains prime real-estate in the eyes of many investors.
	The base sits just 50 miles northwest of Manila, and, with a minor
extension, its airport could accommodate a fully loaded Boeing 747
jetliner.
	Subic also has a large container port, fuel-storage facility and
dozens of modern office and residential buildings. A diesel generator
supplies up to 26 megawatts of electricity, insulating Subic from the
chronic brownouts the rest of the Philippines suffers from.
	``To duplicate what you have here would take years and billions of
dollars,'' said World Bank consultant Carl Goderez.
	SBMA's Legasto said more than 400 companies have expressed interest
in opening shop at the base. He expects about two dozen small- and
medium-sized companies to sign finalized deals by year's end.
	``Just in the past two weeks, two companies have begun screening
potential employees,'' Legasto said, adding that employment from the
firms should total 3,000 jobs.
	The most promising interest has come from Taiwan, which sees Subic as
both a prime investment and a good way to win new friends in the region,
where old allies such as South Korea and Singapore are warming up to
Taipei's enemy, communist China.
	In August, a Taiwan government-backed consortium agreed in principle
to lease 740 acres of Subic for labor-intensive industries, such as the
manufacture of toys and sporting goods.
	Taiwanese officials in Manila say their nation's interest is genuine,
but sources are also quick to point out that no final agreement has been
signed to date.