THE Philippine Ports Authority (PPA)
has approved the terms of reference for the privatization
of Manila North Harbor, giving the entire facility to
a single operator and allowing entry of shipping firms
in port operations. An official of the PPA said the
board approved the terms during its monthly meeting
last week. "The (PPA) board thinks that it (single
terminal, one operator) is the most feasible because
there is already competition from Pier 15 (South Harbor)
and Harbour Centre around," he said. Earlier, the
plan was to divide the facility into four terminals-two
main cargo terminals competing with each other, a passenger
terminal, and terminal for trampers. Each of the terminals
will have an operator. This time, the official said,
the North Harbor will still have those components but
will be under a single operator that would market the
facilities to other concessionaires. "They could
even make the Pier 2 and Pier 4 a tourist area, just
like in San Francisco," he said. The board also
increased the participation limit for shipping lines
to 20% from 5% approved earlier. The official explained
that if shipping lines decide to participate in the
consortium that would operate the North Harbor, each
would be limited to only 20 percent. PPA, however, did
not place a limit on the number of shipping lines allowed
in a consortium. "If five of them (shipping lines)
decide to form a consortium with equal sharing, that
would be allowed." PPA earlier wanted to block
shipping line owners from operating the port due to
fears they may hinder competitor vessels from berthing.
The terms will now be given to the National Economic
and Development Authority-Investment Coordination Committee.
PPA first approved in February this year the terms of
reference of the privatization, containing a two-operator
provision for cargo handling operations. A month later,
the PPA was forced to revise the terms after port users,
represented by the Philippine Chamber of Commerce and
Industry, said the two-operator scheme was not viable.
It was PCCI's idea to have a multi-operator scheme in
the North Harbor to foster competition in the first
place.
PORT operator International Container
Terminal Services, Inc. (ICTSI) and domestic shipping
company Aboitiz Transport System (ATS) have permanently
dropped plans to bid for the North Harbor, saying they
would much rather focus on their main businesses. Francis
Andrews, ICTSI senior vice president, said the company's
focus is on acquiring small terminals around the world,
and developing then reselling them at a premium. "Our
international operations are very different from domestic
operations. We are presently focusing on global expansion
and have no plans for the local industry as of yet,"
he said. The firm recently bought a 95% stake in Indonesian
port operator PT Makassar Terminal Services for $5.6
million. It has also placed several bids in other ports
across the globe, including the Leon D. Guerrero Port
in Guam. Andrews said ICTSI is also not interested in
acquiring other domestic ports up for privatization.
ICTSI has facilities in Batangas, Subic Bay, and South
Cotabato, but most are underperforming due to the sluggish
growth of the economy. ATSC chairman Jon Ramon Aboitiz,
on the other hand, said the company sees "no need
to bid for North Harbor even if other shipping lines
are planning to do so as we are based comfortably in
the South Harbor." Government wants the industry's
leading players to operate the North Harbor since very
likely they would be the ones finally capable of undertaking
the facility's modernization. When the PPA Board approved
a version of the terms of reference in February, it
limited the participation of shipping firms in the operation
of the port to only 5%. PPA general manager Oscar Sevilla,
during a public hearing on the privatization of the
facility, however, said he favored the entry of shipping
lines in port operations in order to widen the pool
of potential operators. The danger of unfair competition
would not be a problem since PPA would still oversee
operations and could easily take over if there are complaints,
Sevilla said.
THE Bureau of Customs (BOC) collected
revenues of P17.2 billion in May, up 41% more than the
P12.2 billion collected last year. The May collection
also surpassed by 4.3% or P702 million the target of
P16.5 billion for the month. The May figure brought
total collections for the first five months to P75.8
billion, 6% or P4.14 billion higher than the target
of P71.7 billion. The January-May collection is also
36% higher than P55.8 billion the BOC posted last year.
Customs Commissioner Napoleon Morales said he may reassign
district collectors who failed to meet their targets.
Morales, citing the implementation of the Lateral Attrition
Law on June 14, said eight collectors will have to explain
why they failed to meet their targets. The collectors,
he said, may go through a grading process before being
transferred. They are Carlos So of the Manila International
Container Port (MICP), Ricardo Belmonte of Ninoy Aquino
International Airport (NAIA), Lourdes Mangaoang of Cebu,
William Reyes of Surigao, Roberto Sacramento of Cagayan
de Oro, John Tan of Davao, Andres Salvacion of Subic
and Atty Ronnie Silvestre of Clark. The Manila International
Container Port missed its target by 23.3%; Cebu by 24.2%;
Cagayan de Oro, 51.5%; and Zamboanga, 37.5%. Surigao,
NAIA, and Subic and Clark, missed theirs by more than
7.5% each. Port districts which exceeded their goals
include San Fernando, Manila, Batangas, Legaspi, Iloilo,
Tacloban and Davao. The district of Iloilo posted the
highest performance with collections growing 661.5%
from its target followed by the district of Tacloban
which collected 30% more than its P30-million target,
and the district of Batangas which raked in 25% higher
than its goal.
INTERNATIONAL Container Terminal
Services, Inc. (ICTSI) is planning to install gamma
ray scanners or radiation sensors at its Manila International
Container Terminal (MICT) this year to boost security
measures at the port. Being eyed is the installation
of an optical identification system to be located
at the import and export gate to further place MICT
at par with international security standards particularly
the International Ship and Port Facility Security
(ISPS) Code. MICT general manager Francis Andrews
said the scanners will boost ICTSI's centralized gate
terminal project which features computer imaging and
tracking systems, electronic boom barriers, and weighbridges.
The scanners will be hard wired to an international
network capable of alerting high-level officials of
the need to examine suspicious cargo and take appropriate
action. The equipment will ensure no radioactive material
is smuggled in or out at the MICT. Under the optical
identification system to be implemented next year,
all trucks' plate numbers and their drivers will be
registered, doing away with voluminous paperwork for
proper identification. ICTSI officials earlier said
experts from the United States Homeland Security Department
and the US Megaport Initiative are helping install
sensitive equipment at the port's centralized gate
project expected to become operational this month.
The Megaports Initiative, overseen by the National
Nuclear Security Administration of the US Department
of Energy, was set up in 2003 to monitor, prevent,
and intercept the trafficking of special nuclear materials
and other radioactive materials, which could be used
by terrorists in creating nuclear weapons, throughout
the global maritime network. Its aim is to get cooperation
from other countries to equip modern seaports with
radiation detection equipment and allow US officials
to assess their ports for vulnerability. In 2003 and
2004, the US and British governments installed hundreds
of radiation detectors at its major ports and airports.
NEGROS Navigation Company sees a
turnaround in business this year, as it expects higher
net income in the second quarter, enough to put the
business back in the black for the entire 2006. The
company eyes a P108 million net income during the
second quarter, a reversal from the net loss of P29.2
million during the previous quarter. For the third
quarter, however, a P57 million net loss is expected.
Projections look better for the fourth quarter with
a P26 million net income. For the entire 2006, a net
of P47 million is projected, including debt payments,
compared to the previous year's net loss of P134 million.
"As in the past, the company will make its biggest
run in the second quarter, which is normally the travel
season," it said. "The third quarter, which
is largely the rainy season, will be much like the
first quarter." This year could be the first
time for Nenaco since a Manila court approved its
corporate rehabilitation in the fourth quarter of
2004. The company, however, said it does not expect
passenger and cargo traffic to pick up this year as
a result of various factors, including the sluggish
growth of the local economy and continued increases
in oil prices. "The passage business will be
at best flat whilst the cargo business will maintain
its steady growth," said Nenaco, a unit of publicly-listed
Metro Pacific Corp. It added that stiff competition
from the roll on-roll off service, and the deteriorating
number of passengers, as well as the aggressive marketing
of some airline firms to bring down their cost have
prevented the company from raking in more income from
operations. During the first quarter, revenue from
passage plummeted 13% but strong cargo volume offset
the decline. Including ramp usage fee, the total favorable
variance for freight is about P27 million, just enough
to cushion the mediocre performance of the passage
business. For the period, Nenaco was able to trim
losses after it used only six vessels from nine last
year. Net revenue was also lower than last year, but
operating costs plummeted on a much higher scale,
it said. Meanwhile, Metro Pacific intends to replace
two of Nenaco's passenger ships with freight and cargo
vessels in a refleeting plan that the company will
undertake.
Ships are also to be redesigned so they will consume
less fuel.
DESPITE suffering massive losses
due to skyrocketing fuel prices, Aboitiz Equity Ventures
(AEV) president and chief executive officer Jon Ramon
Aboitiz said the company has no plans to reduce the
number of ports being serviced by Aboitiz Transport
System (ATS)'s 2Go Road Ro-Ro Terminal System (RRTS).
AEV is the mother company of ATS. Aboitiz said he
sees no reason to reduce the 21 ports in Mindanao
and Visayas currently being serviced by 2Go RRTS as
the logistics unit is doing well. 2GO RRTS handled
14,000 TEUs last year. Officials are predicting a
30% volume growth for 2006, the bulk of which will
come from the Manila-Mindanao-Manila market. 2GO-RRTS
is even studying the viability of some routes in the
South which it plans to connect to Manila such as
General Santos, Cagayan de Oro, and Davao in Mindanao,
and Cebu. In these routes, it plans to ship fresh
fruits, vegetables, meat, tuna and other processed
fish and poultry products. ATS, operator of 2GO and
SuperFerry, the country's largest shipping line, posted
consolidated revenue of P2.5 billion for the first
quarter, a 12% decrease compared to last year's figure.
The company attributed the decrease to less international
charter business from its subsidiary company, Jebsen
Management (BVI) Ltd. Jebsen suffered from unfavorable
market conditions, including capacity reduction and
rising fuel costs, resulting in lower volumes. The
reduction contributed to the company's net loss registered
at P192.4 million. In spite of rising fuel prices,
at 34% higher versus the same period last year, the
company managed to lower its total costs and expenses
by 8% from close to P3 billion in the first quarter
2005 to P2.7 billion in 2006.
