Investment pours into Subic Bay

LESS than one year after assuming jurisdiction over the Subic Bay Free Port, Philippine officials have approved investments worth more than eight billion pesos (about HK$2.4 billion) at the former US naval base.

The figure represents 24 projects ranging from hotels and casinos to cargo and light manufacturing operations.

Several were approved last week before the chairman of the Subic Bay Metropolitan Authority (SBMA), Richard Gordon, left for the US to lure American investors to Subic.

SBMA officials said they expect the projects to generate as many as 10,000 jobs in the 14,000-hectare zone.

About 3,000 people have been employed by private ventures at the former base and about 8,000 have been taken on as unpaid volunteers.

The largest investments have come from Taiwan, Malaysia, the US and the Philippines.

More large-scale investments are expected as the SBMA moves to privatise several facilities and operations, including the port and international airport.

One of the biggest investments is by the Malaysian firm Resorts World, which plans to sink about 2.5 billion pesos into a hotel and casino complex.

The group expects to complete work on a casino and 50-room bay-front hotel by the end of this year. Future plans include a five-star, 400-room hotel and golf course.

The Manila-based Subic International Hotel Corp and Subic Resort Corp has invested 46 million pesos in several hotels and restaurant projects, which will create employment for about 300 people.

The biggest existing project is the US$100 million investment by Texas-based Coastal Petroleum in Subic's fuel depot. The firm obtained a 25-year lease to run the 2.4-million-barrel tank farm.

By January, another American company, Enron, plans to open a new 105-megawatt, four-billion-peso power plant. The facility, along with the existing 26.4 megawatt plant, will supply power to the free port and surrounding municipalities.

Mr Gordon said a third US firm, courier giant Federal Express, had placed Subic on its site selection short-list for a new Asian hub.

By the end of 1994, officials expect work to be completed on an export processing zone funded by a consortium of private and public bodies in Taiwan. The 300-hectare zone will provide Taiwan with an overseas export base.

The zone is being funded with a US$60 million low-interest loan arranged by Taiwan's International Economic Co-operation Development Foundation.

The first tranche of $20 million is being prepared for signing.

According to the SBMA, about 75 companies have expressed interest in setting up in the zone, but the new park will have enough room for about 300 manufacturing ventures.

Other projects recently approved by the SBMA include a 25 million peso leather goods plant by Kindberg Leder of the Philippines; a factory producing industrial lifts and container handling cranes by Australia's Electruck; and a 21.7 million peso shoe factory by Taiwan's Frolics, a licensed maker of LA Gear, Timberland and Reebok shoes.

Two duty-free shops will be running by the end of this year, including a 50 million peso store by Subic Duty Free Shoppers.

SBMA officials are negotiating with Marissco of Singapore, which proposes to build a 116 million peso seafood processing plant.