Posted on December 9, 2024
The Philippine Ports Authority (PPA) is eyeing to bid out contracts for various ports, including General Santos, by the first quarter of 2025, PPA general manager Jay Daniel Santiago said in a press briefing on December 6.
The PPA chief said he hopes amendments to the Port Terminal Management Regulatory Framework (PTMRF)–guidelines in the award of port terminal management contracts–will be approved by the first quarter of next year so they can start bidding out again.
Bidding under PTMRF is on hold as PPA seeks approval for revised guidelines designed to comply with implementing rules and regulations (IRR) of Republic Act No. 11966 (PPP Code of the Philippines) that took effect in April 2024.
At the sidelines of the media briefing, PPA assistant general manager for operations Mark Jon Palomar told PortCalls PPA has already submitted its proposed revised policy to the Office of the Government Corporate Counsel (OGCC). OGCC provides legal service to government-owned and -controlled corporations such as PPA.
Ports eyed for bidding out next year include General Santos, Lucena, and the port clusters of Balingoan and Jasaan in Misamis Oriental; Ambulong and Romblon in Romblon; Tablas and Carmen m in Romblon; Roxas, Mansalay, and Bulalacao in Oriental Mindoro; Bansud, Pola, and Puerto Galera in Oriental Mindoro; and Abra de Ilog and San Jose in Occidental Mindoro.
Under PPA Administrative Order (AO) No. 03-2023, the clustering of port terminal management at several ports may be included to ensure the commercial viability of the contractor.
General Santos port will be under Tier 2 while the rest will be under Tier 3 of the PTMRF.
Under the PTMRF, embodied in PPA AO No. 03-2016, as amended by AO 03-2023, contractors for Tier 2 ports handle the physical land infrastructure, above-ground fixtures and semi-fixtures, and mobile-handling equipment while PPA handles physical undersea infrastructure for a 20-year concession period.
For Tier 3 ports, the contractor handles above-ground fixtures and mobile-handling equipment for a 15-year concession period. Tier 1, meanwhile, is a 25-year full concession
Since PPA started bidding out port terminal management contracts under PTMRF, it had already bid out around 20 ports, mostly under Tier 3 except for Davao port under Tier 2 and Iloilo Commercial Port Complex (renamed Visayas Container Terminal) under Tier 1.
Santiago earlier said implementation of the PTMRF is PPA embarking on the process of splitting its regulatory and operational functions by privatizing operations of ports.
Several industry stakeholders and business groups have for years been recommending the separation of PPA’s functions, citing conflict of interest and saying exercising both functions “unnecessarily increases logistics costs.”
Stakeholders said policies allowing PPA to secure a share from cargo-handling revenues constitute “conflict of interest” as the regulator “now benefits from its own regulation” and hence provides the regulator “the incentive to increase the rate to improve its financial health.”
PPA Port Operations and Services Department manager Atty. Ma. Asuncion Hiyasmin Delos Santos earlier explained that under the PTMRF, “there is no government share being collected” but there is only “minimum concession fee” to be remitted by the concessionaire for the duration of the concession.
“So even if there is a request for approval of [increase of] rates, PPA will not benefit from that because the concession fee has been defined already in the terms of reference and also in the contract of the port terminal management operator,” Delos Santos said.
Under AO 03-2016, the contractor should remit to PPA a periodic concession and/or management fee and a variable fee as specified in the agreement between the ports authority and the contractor. The concession and/or management fee will be increased periodically, subject to a pre-established formula to be determined by PPA.
Should actual traffic volumes exceed certain pre-determined amounts in any given period during the agreement, the contractor should also remit a variable fee to PPA. – Roumina Pablo
