Manila: Sulpicio Lines' grounded passenger vessels may soon be sailing again-under the flag of Negros Navigation (Nenaco), the 76-year-old Iloilo shipping company that is barely out of bankruptcy and rehabilitation, reports the Manila Standard Today. Officials of the Cebu-based company owned by the Go family are in talks with the owners of the much-smaller Negros Navigation for the sale of Sulpicio's ropax (roll-on/off-passenger) ferries, which will then be re-outfitted and upgraded to conform to government and shipping industry regulations and pressed into service under the old "NN" banner of Nenaco.
The Ilonggo shipping outfit has apparently found a group of investors who are willing to purchase Sulpicio's fleet, from which Nenaco will cherry-pick the most serviceable and sell the rest for scrap. Because of Sulpicio's continuing financial troubles, the Nenaco offer could be hard to resist-especially since Sulpicio will have a tough time getting appropriate insurance for its vessels even after it completes an expensive upgrade that will surely be made a prerequisite for the lifting of the grounding of its fleet.
Separately, to ensure stronger oversight and greater accountability going forward, Catanduanes Rep. Joseph Santiago said Congress should mandate Sulpicio Lines Inc. and other inter-island shipping operators with vessels that carry more than 100 passengers to apply for and obtain a legislative franchise.
"Commercial passenger airlines are already required to secure a franchise from Congress. Passenger shipping operators should likewise be obliged to do so," said Santiago, vice chairman of the House legislative franchises committee.
At present, water passenger transport service providers simply get an administrative franchise from the Maritime Industry Authority, an agency attached to the Department of Transportation and Communications.
Corporations issued legislative franchises are duty-bound to submit periodic reports to Congress, on top of other regulatory filings.
Santiago also said Congress should direct Sulpicio and other passenger shipping firms to sell at least 25 percent of their equity to the investing public and list their shares in the Philippine Stock Exchange (PSE).
"Our sense is, entities compelled to live by higher corporate governance standards, such as those listed in the PSE, tend to behave more responsibly. Not just in terms of efficiently producing profits for shareholders, but also in terms of adequately complying with public safety and environmental protection standards," Santiago said.
Aboitiz Transport System Corp., Sulpicio's bigger rival, is already a PSE-listed entity.
Sulpicio remains a closely held family-owned firm. Securities and Exchange Commission records show that Sulpicio's governing board is composed entirely of family members. The firm's principal officers are also all members of the Go family in Cebu. [1/8/08]
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