Arroyo witnesses signing of Subic shipyard land lease with South Korean group

Although being embattled by continuous coup attempts against her government, Philippine President Arroyo witnessed on Tuesday the signing of a land lease agreement between South Korean Hanjin Heavy Industries and Construction Co., Ltd. and the Subic Bay Metropolitan Authority for the South Korean company to construct and operate a 1 billion U.S. dollar shipyard at the Subic Bay Freeport Zone in Zambales.

Hanjin Heavy Industries & Construction Container Ships

The lease agreement covers a 230-hectare land and Hanjin will invest 1 billion U.S. dollars over the next 10 years for a steel structure fabrication yard. The shipyard is expected to be finished by 2016.

Once operational, the shipyard will build liquefied natural gas (LNG) carriers and very large container carriers (VLCC) for customers around the world. The investment is also expected to boost economic activity at the country premiere freeport zone and generate 30,000 to 40,000 jobs.

After the signing ceremony at the Malacanang presidential palace, Philippine Trade and Industry Secretary Peter Favila said the South Korean investment shows that foreign investors' confidence in the country remains despite the destabilization plots against the government.

He said investors were impressed by President Arroyo's handling of attempts by the political opposition and other critics of the administration to destabilize the government. Favila also said the country's growth would have been faster and sustained if the political distractions would be lessened.

Hanjin said its investment in Subic was part of its global strategy for competitiveness in shipbuilding industry by expanding its operations overseas.

Hanjin cargo ship cruises along the Huang Pu River
Source: Xinhua