Workers back PNCC plan after getting assurance of pay package

BY FELIPE F. SALVOSA II, BusinessWorld Sub-Editor Workers at the Philippine National Construction Corp. (PNCC) are backing a drastic plan by the management to restructure the state-owned tollway operator by settling old debts and retrenching employees, after getting assurances that benefits and separation packages will be prioritized. PNCC’s three labor unions signed a manifesto supporting the corporate restructuring plan as well as the state firm’s bid to have its franchise, which expires April 2007, extended by another 25 years. "We appreciate [the] PNCC management for ensuring that the labor force is given priority for benefits and separation package, which are well beyond what is mandated by law," said the manifesto, signed by officials of the PNCC Tollway Supervisors’ Association, the Toll Operations Employees and Workers Union, and the Philippine Tollway Company Guard Union. PNCC has so far spent about a billion pesos to retrench workers, and has cut its 2,000-strong work force to more than half. The listed state construction firm plans to be a holding company with a master franchise, outsourcing toll operations of the North and South Luzon expressways to the private sector. The North Luzon Expressway (NLEX) is already under the Lopez-led Manila North Tollways Corp. while the South Luzon Expressway (SLEX) is being rehabilitated and expanded by Malaysia’s MTD Capital Berhad. To do this, PNCC plans to clean up its balance sheet, planning to pay P6.2 billion to settle liabilities to Japan’s Marubeni Corp. incurred in the late 1970s, which has been assigned to a Hong Kong outfit. PNCC also plans to settle unpaid concession fees to the National Government as well as loans from Philippine National Bank. The plan was meant to convince Congress to extend the franchise. The House of Representatives has approved the extension, paving the way for deliberations in the Senate. PNCC’s restructuring, however, is raising questions, particularly from shareholder Rodolfo M. Cuenca, a Marcos associate, who claimed the plan would kill the state firm. Mr. Cuenca served as president of the Construction and Development Corp. of the Philippines, PNCC’s forerunner. A group calling itself the "Concerned Employees of PNCC" is circulating a letter claiming the proposed P6.2-billion payment to Hong Kong-based Radstock Securities Ltd. to be anomalous as the government will supposedly lose P20 billion worth of properties under a compromise agreement. Radstock won over PNCC in a Mandaluyong trial court in 2002, and the judgment is now worth more than P17 billion. The compromise has been submitted to the Supreme Court for approval. A PNCC union leader, however, said workers are not opposed to the restructuring plan, satisfied with the separation package. Abraham T. Tamayo, president of the Toll Operations Employees and Workers Union, said PNCC is offering two-and-a-half months for every year of service, covering basic pay and emergency cost of living allowance. Employees who have served for more than 20 years have been getting as much as P1.5 million in separation pay, he said. Mr. Tamayo said his union membership has decreased to 330 from more than 500 as most workers have volunteered to retire. About 150 workers, however, want to be absorbed by the Malaysian firm undertaking the SLEX rehab. Lawyer Maridel Palogan Tacardon, PNCC spokeswoman, said the Malaysians are "inclined" to absorb the workers. MTD Capital is expected to take over SLEX operations by 2008 or 2009. PNCC’s separation package, she said, is more than what is required by law. "Our creditors are not getting any cash payment upfront. We are reserving cash for labor," the PNCC official said. Under the proposed compromise, Radstock will get PNCC’s rights over 12.9 hectares of land. Radstock will own 20% of PNCC and will get half of PNCC’s 6% share in NLEX toll revenues starting 2008.