Industry News

[June 03, 2007]

Ship repair facility returns to Subic Bay free port

(Business World (Philippines) Via Thomson Dialog NewsEdge) Subic Bay Freeport Zone - Subic Drydock, a subsidiary of prominent United States-based ship repair service provider Cabras Marine Corp., announced the arrival of AFDM-5 floating dry dock on Saturday which would revive the operations of the Ship Repair Facilities (SRF).

Cabras is a private firm which has been considered as the leading ship repair service provider of tugboats, salvage vessels, and waterfront maintenance for the United States Navy and commercial vessels in Guam and Micronesia for over 30 years.

Fifteen years after the floating dry dock was towed out of Subic Bay as part of the 1992 US base withdrawal, the sophisticated equipment has been returned and now back in ship repair business.

In October 2005, Subic Bay Metropolitan Authority (SBMA) Chairman Feliciano G. Salonga and Administrator Armand C. Arreza signed a long-term lease contract with Subic Drydock Corp. President and Chief Executive Officer Catalino Bondoc for the setting up of a P275-million SRF.

Mr. Salonga said the floating dry dock would open opportunities for highly skilled former US base workers who were trained and used to be employed with the SRF during US Navy days.

Shut down in 1992 after the historic withdrawal of US Naval troops and facilities, the floating dry docks (AFDM-5) were towed to Hawaii, USA, displacing thousands of highly skilled direct SRF employees and indirect workers.

Cabras, through sister company, Malayan Towage and Salvage Corp. (MTSC), purchased the AFDM-5 from the state government of Guam after the US Armed Forces donated the sophisticated ship repair machinery before being decommissioned allegedly for lack of operational and technical manpower.

Mr. Bondoc earlier told BusinessWorld that while the floating docks were strictly utilized for military purpose, it will now be servicing commercial clienteles for ships like interisland-sized vessels and ferries.

He added that Subic Dry Dock would also be offering ship repair service to Philippine Navy ships and other navy vessels within Asia.

Mr. Bondoc said the international shipping market will be the primary target client of the project, particularly of vessels operating in the region.

These vessels are represented by international shipping agents composed mostly of customers of Malayan group of companies.

Subic Dry Dock will also be looking into service contracts with 88 domestic shipping companies operating 315 domestic vessels.

Subic Dry Dock will also secure the Master Ship Repair Agreement (MSRA) and be accredited for US Navy ship repair contracts that require dry docking and repair services particularly from the Military Sealift Command based in Yokohama, Japan.

Initially, we will be hiring 150 workers which will be made up of former SRF workers who will also be in charge as trainers to new breed and young ship repair workers, Subic Dock Project Director Gerald Hammond said.

Mr. Hammond added that the ship repair facility is expected to be completed and operational in two months after the arrival of another dry dock to support its operations and upgrade handling capabilities.

The project will be employing 600 skilled and semi-skilled workers composed mostly of those who used to be stationed in the SRF area for their familiarity on the dock and at the same time train apprentice.

The company's total capital expenditure of around P276 million will be used to acquire the dry docks amounting to P165 million and the remaining P110 million would be for the improvement of berthing and other port facilities of the Bravo pier inside the SRF compound such as the administrative office building, machine shop and warehouse.

The AFDM-5 floating dry dock is a wielded structural steel capable of accommodating ships of 18,000 tons displacement with length-span of up to 150 meters.

Subic Freeport bested other port areas that the company explored for the setting up of its ship repair facility project such as the Sarangani Bay in General Santos and Cam Ranh Bay in Vietnam.

Copyright 2007 Business World Publishing Corporation, Source: The Financial Times Limited

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