SBMA may fund P1-B convention center
Subic Bay Development Authority (SBMA) may be forced to bankroll the planned P1-billion convention center if the Olongapo local government would not fund it since it is an anchor project in the 40hectare Gateway commercial center, which is being redeveloped to enhance the Freeport’s tourist attraction facilities.
SBMA administrator and chief executive officer Armand C. Arreza, however, said that all convention centers are built by local governments like the one in Cebu. The local government of Olongapo, however, is not cool to funding the facility for international conferences.
As the anchor project in the redevelopment of the Gateway commercial area, the convention center is designed by the country’s top Architect Jun Palafox in an 8-hectare convention center with a 3,500 capacity Plenary Hall with 20 meeting rooms varying from 200 to 1,500 seating capacity.
"Its bare cost would be around P700 million but could reach P1 billion once it is fully furnished," Arreza said.
Arreza said that should SBMA decides to fund the convention center it prefers to use its internally generated funds and not from loans. SBMA though appears capable of funding the project.
For one, SBMA is on track with its revenue generation although it still needs to improve its collection from among its lessees.
Under its charter, SBMA’s total assets were valued at P20 billion but with its P3 billion investment for the airport and other improvements the value improved to P23 billion with a depreciation cost provision of P200 million annually.
Part of its revenues include P700 million in noncash and P500 million cash generation annually.
Less with its annual debt servicing of between $ 3 million to $ 4 million and capital expenditures of P150 million annually, SBMA ends up with P300 million in surplus funds.
"If we don’t have debts to service, we could easily put up the convention center," Arreza said.
At present, SBMA’s total debts may reach about $ 200 million including the $ 23 million from Taiwan payable in 20 years, World Bank with $ 60 million payable in 15 years and $ 120 million from the Japan Bank for International Cooperation for the airport expansion payable within 40 years.
As part of its redevelopment program, SBMA is spending for the construction of a new road from TIPO that would lead into the new commercial center. At present, visitors pass through the back of the proposed commercial center.
"Our improvements are mostly tourism-related," he said saying the redevelopment of the Gateway commercial district started during the term of former SBMA administrator Felicito Payumo.
To complement the convention center development, Arreza he had talks with a Singaporean-based hotel and casino operators to invest in a 500-room hotel facility.
Arreza had also met with five mall developers in the country to put up a shopping mall in the freeport’s commercial district.
Tourist arrivals in the Freeport have been dwindling since the closure of the casino in Legenda Hotel.
Compared to Clark, which has several airlines flying for international routes, Subic has only a few.
As a result, tourist arrivals only reached 40,000 last year as against Clark with 400,000.
Arreza said that tourism revenues contribute less than 10 percent of its total income while lease payments account for 60 percent of the total.
Revenues from FedEx operation contribute P800 million a year mostly from landing fees. But the logistics firm is leaving its OneAsia hub in Subic by end 2008.(BCM)
SBMA administrator and chief executive officer Armand C. Arreza, however, said that all convention centers are built by local governments like the one in Cebu. The local government of Olongapo, however, is not cool to funding the facility for international conferences.
As the anchor project in the redevelopment of the Gateway commercial area, the convention center is designed by the country’s top Architect Jun Palafox in an 8-hectare convention center with a 3,500 capacity Plenary Hall with 20 meeting rooms varying from 200 to 1,500 seating capacity.
"Its bare cost would be around P700 million but could reach P1 billion once it is fully furnished," Arreza said.
Arreza said that should SBMA decides to fund the convention center it prefers to use its internally generated funds and not from loans. SBMA though appears capable of funding the project.
For one, SBMA is on track with its revenue generation although it still needs to improve its collection from among its lessees.
Under its charter, SBMA’s total assets were valued at P20 billion but with its P3 billion investment for the airport and other improvements the value improved to P23 billion with a depreciation cost provision of P200 million annually.
Part of its revenues include P700 million in noncash and P500 million cash generation annually.
Less with its annual debt servicing of between $ 3 million to $ 4 million and capital expenditures of P150 million annually, SBMA ends up with P300 million in surplus funds.
"If we don’t have debts to service, we could easily put up the convention center," Arreza said.
At present, SBMA’s total debts may reach about $ 200 million including the $ 23 million from Taiwan payable in 20 years, World Bank with $ 60 million payable in 15 years and $ 120 million from the Japan Bank for International Cooperation for the airport expansion payable within 40 years.
As part of its redevelopment program, SBMA is spending for the construction of a new road from TIPO that would lead into the new commercial center. At present, visitors pass through the back of the proposed commercial center.
"Our improvements are mostly tourism-related," he said saying the redevelopment of the Gateway commercial district started during the term of former SBMA administrator Felicito Payumo.
To complement the convention center development, Arreza he had talks with a Singaporean-based hotel and casino operators to invest in a 500-room hotel facility.
Arreza had also met with five mall developers in the country to put up a shopping mall in the freeport’s commercial district.
Tourist arrivals in the Freeport have been dwindling since the closure of the casino in Legenda Hotel.
Compared to Clark, which has several airlines flying for international routes, Subic has only a few.
As a result, tourist arrivals only reached 40,000 last year as against Clark with 400,000.
Arreza said that tourism revenues contribute less than 10 percent of its total income while lease payments account for 60 percent of the total.
Revenues from FedEx operation contribute P800 million a year mostly from landing fees. But the logistics firm is leaving its OneAsia hub in Subic by end 2008.(BCM)
posted by OlongapoCity Zambales at
4:49 AM
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