Q1 sales of 3 three big-ticket state assets eyed

Three big-ticket items that the government failed to sell last year will hopefully be auctioned off this quarter, Finance Secretary Margarito B. Teves said. "We are targeting to get the [privatization] proceeds by the 31st of March," Teves told at during the weekend. Asked which items had been included in the first quarter asset sale program, he replied: "The FTI (Food Terminal, Inc.), PNOC-EC (Philippine National Oil Co.-Exploration Corp.) shares, the lease of Fujimi [property]." Target sale dates, except for the Fujimi stake, were not immediately available. The government had expected to raise P30 billion last year from the sale of the three assets. Bidding failures, however, were declared with respect to the FTI and Fujimi auctions, while the PNOC-EC sale did not get off the ground. Teves said the sale of 60 percent of the government's over 99 percent stake in PNOC-EC would generate at least P15 billion, up from the P11 billion expected under the original plan to sell a 40 percent interest. Earlier estimates for FTI and Fujimi, meanwhile, put the likely proceeds at P13 billion and P6 billion, respectively. Despite the higher forecast for PNOC-EC, the Finance department is keeping the privatization target at P30 billion, the same as last year. Officials said they wanted to remain conservative in their forecasts, which they added remained preliminary. According to the Finance department, a 50-year lease contract for the Fujimi property in Tokyo -- part of Japan's World War Two reparations to the Philippines -- may be awarded on February 23. Bidding for the right to develop the property was originally scheduled on Nov. 16 last year but was moved to Dec. 3 and then to the following day. The Dec. 4 auction was declared a failure after the three bidders failed to satisfy technical requirements. FTI, meanwhile, was supposed to have been sold last October but no offers were submitted, marking a third failed auction. The government wants to sell 103 hectares of the 120-ha agro-industrial commercial estate in Taguig City that is host to about 300 firms. Following the auction failures for both assets, the government is now looking to sell them via the negotiated approach. The government, meanwhile, owns 99.78 percent, via parent firm PNOC, of PNOC-EC. The firm has a stake in eight petroleum service contract areas: five located off Palawan and one each in Isabela, the southeast Luzon Basin, and Mindoro. The stake sale was originally set for 2008 but deferred over the next two years due to unfavorable market conditions. — Alexis Douglas B. Romero, BusinessWorld