Freeze Manila port expansion to steer more cargo to Batangas, Subic, urge experts

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Subic port photo courtesy of Subic Bay Metropolitan Authority
Subic port photo courtesy of Subic Bay Metropolitan Authority
Subic port photo courtesy of Subic Bay Metropolitan Authority

A government think tank suggests suspending any plans to further expand Manila ports as a way to address port congestion and increase utilization of the ports of Batangas and Subic.

The Philippine Institute for Development Studies (PIDS) in its discussion paper entitled “A System-wide Study of the Logistics Industry in the Greater Capital Region” released in mid March, pushed for limiting capacity of Manila International Container Terminal (MICT) to Berth 6 and dropping the planned conversion of Manila South Harbor Pier 9 into a foreign container berth.

The PIDS study team recommended this option – chosen from one of four port traffic development options for the Greater Capital Region put forward by the Japan International Cooperation Agency (JICA) in its 2013 study –  because it is seen to address the Manila port congestion problem in 2020 and beyond, and generates (based on JICA’s forecast) the highest utilization rates for Batangas and Subic ports.

The preferred PIDS option, however, has been overtaken by recent events. International Container Terminal Services, Inc (ICTSI), operator of the MICT, in February this year has already opened Berth 7, currently being used for empty containers but when fully operational will also host laden containers.

The PIDS study team also recommended that the Department of Transportation and Communications and its attached agency Philippine Ports Authority (PPA) renegotiate contracts with private port operators ICTSI and Asian Terminals Inc (operator of the Manila South Harbor) “to explore some mutual agreement on a freeze on berth expansion, but possibly allowing expansion of yard capacity for storage and efficient handling of laden and empty containers.”

Among all options it had pushed for in its 2013 study, JICA had favored the rescheduling of the Manila port capacity expansion, or delaying MICT Berth 7 and South Harbor Pier 9 conversion until 2019. JICA said this scenario does not cap MICT’s and South Harbor’s capacities but delay them until Batangas and Subic ports attained full utilization.

JICA recommended this option because it said it does not require contract termination or renegotiation with private port operators at the same time ensures full utilization of Batangas and Subic ports by 2019.

PIDS, meanwhile, noted that during the July 30, 2013 National Economic and Development Authority-Infrastructure Committee (InfraCom) meeting, DOTC and PPA said they had already agreed to restrict expansion of Manila ports. During its September 11, 2013 meeting, the InfraCom decided to elevate the issue to President Aquino for his policy decision, PIDS said.

It added the continued dominance of Manila ports puts pressure not only on roads within the port area, but also along major roads in Metro Manila due to congestion created by port-related traffic.

Moreover, the study team cited the September 2014 report entitled “Port and Road Infrastructure for Greater Luzon Trade,” which stated that “the root cause of congestion is the lack of a dedicated port access road to the Manila ports,” and which urged fast tracked construction of the North Harbor Link Road and the Port Connector Road.

According to the September 2014 study, as both Metro Manila and Manila ports continue to grow, the relocation of ports to new sites would be inevitable.

PIDS said a successful plan to “divert container traffic to Batangas and Subic Ports would be at most only a near-term solution to decongest Manila Ports”; what is needed is a long-term plan that requires expanding capacity of the two ports ahead of demand. – Roumina Pablo