Norway investing in Philippine shipyard project

A Norwegian firm will invest $4.3 million in the construction of a shipyard in Subic Bay Freeport in the Philippines, further boosting the capability of this former naval base for maritime logistics and services.

The Subic Bay Metropolitan Authority (SBMA) signed recently an agreement with the Subic Bay Shipyard Consortium (SBSC) for the establishment of a shipbuilding and repair facility at the former US Navy ship repair facility (SRF), which is also being developed by another firm into a terminal for international cruise ships.

SBSC president and chief executive officer Nils-Ottar Lonoy said his firm will be utilizing the so-called “slipway and skid system” which can accommodate vessels of up to 90 metres in length for dry docking and repair. “We really see the necessity to upgrade the domestic fleet,” Lonoy said, noting that the shipyard project was conceptualized in 2005 to take advantage of excellent pier facilities at SRF.

Lonoy said the company is now studying the establishment of the shipbuilding facility as its contribution to the envisioned Subic Bay Maritime Industrial Park. The construction of the new shipyard will begin next month, and the facility is expected to be completed in three to five years, Lonoy said. He also said that his company will be conducting skills training for Filipino ship repair workers needed for its 500-strong manpower requirement.

Lonoy added that his company will hire some of the highly skilled workers who were employed in the ship repair facility of the US Navy in Subic.

During the contract signing, Chairman Salonga said the SBMA sees great prospects in the shipbuilding industry as it has been included in the government?s investment priority program.

Subic Bay has already attracted Hanjin Heavy Industries? new shipyard which is expected to become the fourth largest shipyard in the world, with projected annual sales and export revenues of $6 billion. SBMA investment processing head Ronnie Yambao said that Subic offers a competitive advantage to players in the shipping industry because of its integrated logistics facilities for storage, cargo loading and unloading, packaging, processing and information, and transportation.

In addition, the SBMA is offering to locators incentives such as tax- and duty-free importation, a minimal five percent corporate tax on gross income, unrestricted entry of foreign investments, no foreign exchange control, and four to six years of income tax holiday for investors.