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SCMP Reporter

A major obstacle for Hutchison Whampoa in its protracted bid to win the port-handling contract at Subic Bay in the Philippines has been eliminated after four Philippine officials were cleared of any wrongdoing by the country's ombudsman.

 The clearance of the officials involved in selecting the successful tenderer for the contract has led to speculation as to whether a Hutchison-led joint venture may now be automatically awarded the contract or be asked to bid again for it.

 Hutchison has welcomed the decision, while remaining guarded about the future after the ombudsman's ruling.

 The development of the Philippines' first deep water container port has been continually delayed by a succession of obstacles involving disputed decisions by the Subic Bay Metropolitan Authority and the Philippines Government.

 A joint venture vehicle involving a wholly-owned subsidiary of the group, Hutchison Port Holdings and Guoco Holdings Philippines, had been awarded the contract last year.

 The authority had ruled in favour of the Hutchison-led venture last August, after disqualifying local company International Container Terminal Services from the bidding process.

 It found that allowing International Container to operate the port would violate anti-monopoly laws.

 Philippine President Fidel Ramos reinstated the bid in September, after his chief legal counsel ruled anti-monopoly laws did not apply to Subic Bay due to its standing as a 'free port'.

 As a result, the authority was forced to re-evaluate all bids but again chose the Hutchison-led venture, a decision it said was based on fees as well as planned investments the Hong Kong vehicle had put forward.

 Mr Ramos again stepped into the fray early this year, ordering the cancellation of the award of the Hutchison contract and ordering yet another re-bid.

 This followed claims by International Container that its bid was higher than Hutchison's.

 The authority asserted in defence of its decision Hutchison was offering more investment and lower tariffs for the Subic Bay port.

 The government move prompted an angry outburst from Hutchison, which accused the Philippine government of 'political manipulation' in the matter.

 Hutchison claimed the matter raised questions as to the message the Philippine government was sending to foreign companies.

 A Hutchison Port Holdings spokesman put a different face on the latest development last night, saying the company was very happy with the ombudsman's decision regarding the officials.

  'We believe our position has been vindicated, and this will help boost our regional development efforts to invest in and operate ports in the region and elsewhere,' she said.

 She would not comment on the possible options for Hutchison at Subic Bay, other than stating: 'We are considering all kinds of options in the Philippines, in the region, and elsewhere.'   The head of the authority indicated earlier this year he was keen to 'woo' Hutchison back into the bidding process for the port.



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Hutchison sees obstacle lifted to Subic Bay port project bid