Global Gateway takes over Clark project

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GLOBAL Gateway Development Corp. (GGDC) said it is assuming operational control over the development of the 177-hectare Global Gateway Logistics City (GGLC) project in the Clark Freeport Zone in Pampanga, after it obtained a favorable ruling from the Court of Appeals against the former contractor of the project, Peregrine Development International Inc. (PDII).

GGDC is a wholly owned subsidiary of Kuwaiti private equity investment firm KGL Investment Co. (KGLI) and the project owner and lessee of the Sabah Al-Ahmad GGLC project

The Court of Appeals, in a recent decision, issued a temporary restraining order (TRO) in favor of GGDC in connection with a petition for certiorari filed by GGDC. The TRO effectively sets aside the previous rulings of the Regional Trial Court (RTC) where Peregrine had initially filed its complaint.

Peregrine filed a complaint with the RTC after GGDC lodged an arbitration case against Peregrine in a Singapore court, in which GGDC alleged substantial breaches of the engineering, procurement and management (EPCM) agreement between Peregrine and GGDC.


GGDC said in its petition for certiorari that the EPCM agreement with PDII has already been terminated for reasons expressly allowed under the agreement and that as a consequence, PDII has lost its right to be the sole and exclusive contractor for the project.

Moreover, GGDC cited alleged breaches by Peregrine including cost overruns, dealings unbeneficial to GGDC, the use of GGDC-funded assets for non-GGDC projects, failure to comply with applicable laws which materially affected the project’s implementation, failure to faithfully observe the procurement and bidding procedures to ensure competitive bidding, and willfully committing other acts inimical and adverse to the best interest of GGDC.

Peregrine’s failure to abide by the termination of the agreement and conditions of the EPCM has reportedly caused millions of dollars of unnecessary losses to GGDC, the company said.

GGDC said it had already invested $100 million in the project, which has been delayed by the legal cases filed by Peregrine before the Angeles City RTC.

GGDC expressed its commitment to invest another $150 million in the Global City project by the end of 2015, but GGDC’s ability to move forward was reportedly hampered by the injunction issued by the Angeles City court on the petition by Peregrine, a foreign company established by foreigners in the Virgins Islands, which has not invested anything in the project.

GGDC is a company originally founded by The Port Fund, a private equity fund managed by KGLI whose investors largely consist of the shareholders of government entities of Kuwait and other GCC countries. It has a lease on the property near the Clark International Airport for a period of 50 years, with an option to renew for 25 years.

GGDC said it decided to exercise operational control over the GGLC project after Peregrine violated the EPCM agreement and endangered the project by false accusations and physically not allowing the other contractors to work on the project.

“Peregrine should leave the project amicably and let the legitimate owners finish the project for the benefit of Central Luzon,” GGDC said.

The first locator at the GGLC site is The Medical City Clark, a world-class hospital that is on track for its grand opening in December this year. The 150-bed Medical City Clark, which is being developed as a state-of-the-art, energy-efficient and technology-enabled smart building, is said to be already over 95 percent complete.

In a hearing with the DOTC attended by House Transportation Committee chairman Cesar Sarmiento, Rep. Yeng Guiao and other members of the Central Luzon Alliance of Congressmen, KGLI Asia and GGDC reiterated their commitment to stay in the Philippines and to heavily invest for the development of Clark to generate more jobs and contribute to the growth of the Philippines.

GGDC said the whole project will conform to the highest environmental standards and will entail investments of over $3 billion in new facilities, providing direct employment to more than 3,000 construction and trade workers at the peak of the project’s development.

Once completed, the project will generate employment opportunities to over 300,000 workers with $600 million in annual payroll for entry-level employees, the company said.

KGLI Asia also committed its support for proposed House Bill 00321 of Congressman Guiao to create the Corazon C. Aquino International Airport Authority, which will encourage more investors and locators to set up infrastructure facilities in Clark.

KGLI Asia, a wholly-owned subsidiary of KGLI, has also been involved in humanitarian activities in the Philippines.

KGLI and its Port Fund, whose investments in the Philippines include the GGLC project and an investment in the 2GO Group, committed $1 million for disaster relief and rebuilding efforts in communities affected by Super Typhoon Yolanda (Haiyan).

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