The government is mulling a partnership with private companies to take over the embattled Hanjin Heavy Industries and Construction Corp. Philippines so that the country’s naval forces would no longer need to acquire ships abroad.
Defense Secretary Delfin Lorenzana revealed this plan during the Senate plenary deliberation Wednesday on the Department of National Defense’s allocation in the P3.757-trillion proposed national budget for 2019.
The Senate convened itself into a Committee of the Whole to be able to take up the bankruptcy of Hanjin and directly ask Lorenzana questions.
Lorenzana said Philippine Navy Flag-Officer-In-Command Vice Admiral Robert Empedrad initially raised the idea of managing the operations of the South Korean shipbuilder as it filed for rehabilitation due to financial losses.
“While we sympathize with Hanjin for its financial woes, we are excited with this opportunity because we see the possibility of having our own ship-building capacity in the Philippines,” Lorenzana told senators.
The DND chief said he relayed the proposal to President Duterte who was “very receptive to the idea.”
Lorenzana said the opportunity was “perfect” since the PN is in need of more ships.
The challenge for the government, however, would be to engage private companies and local banks to invest in Hanjin, Lorenzana said.
Hanjin has an outstanding debt of some $400 million with local banks on top of another $900 million from lenders in South Korea.
Sen. Panfilo “Ping” M. Lacson said the P75-billion alleged insertion on the Department of Public Works and Highways budget may be tapped to pay for Hanjin’s $400-million debt. This way, the government may acquire ownership of the company’s shipyard in Subic, Zambales.
Lacson, as vice chairperson of the Senate Finance Committee, sponsors the DND’s proposed budget for this year.
“What if the Philippine government will just take over Hanjin and bid out to possible partners, private entities? This will mean potential income for the government,” Lacson said.
He said the government takeover would be better than allowing a foreign company to continue the shipbuilder’s
operations.
Lacson said the issue hounding Hanjin has far-reaching implications on Filipinos, ranging from security to economic and even social concerns.
But Empedrad, in the plenary debates, admitted that the PN is not capable of managing all of Hanjin’s operations.
Senate Majority Leader Juan Miguel F. Zubiri likewise supported the government plan to partner with private companies to co-manage and save Hanjin.
Zubiri stressed the impact of the company’s bankruptcy to employment, especially as thousands of skilled workers are in danger of losing their jobs.
Hanjin once employed more than 30,000 personnel at the peak of demand.
It currently has some 3,000 employees but may soon trim down the figure to only 300, to continue operations of its ship repair facility.
The Senate leader said acquiring ownership of Hanjin would be beneficial to the country since it would also generate income.
But Zubiri maintained that the government should have a hand over majority of Hanjin’s operations should the plan push through. (Vanne Terrazola)