Home » Ports/Terminals » PPA cause of North Harbor privatization delay?

IT appears the delay in approval of the North Harbor terms of reference (TOR) lies with the Philippine Ports Authority (PPA) and not the National Economic and Development Authority (NEDA).

A NEDA official said PPA, which operates the North Harbor, only gave NEDA the TOR of the privatization process. Several other clearances are still lacking, including a feasibility study and a clearance from the Department of Finance (DOF).

All state firms need to secure a clearance from the DOF-Corporate Affairs Group before undertaking a project since it may affect the national government’s overall fiscal standing.

The NEDA official said his agency has already written PPA about the lacking documents but so far there’s been no response.

At the moment, the terms of the North Harbor privatization are still at the Infrastructure Staff division of NEDA. If all documents have been submitted, the division would then transmit these to the NEDA-Investment Coordination Committee (ICC)-Technical Board, then to the Cabinet-level NEDA-ICC and finally to the NEDA Board, headed by President Gloria Macapagal-Arroyo.

Raul Santos, PPA assistant general manager for corporate affairs and special projects, earlier said that if the NEDA-ICC fails to hand down a decision by August, the remaining months of the year may not be enough to start the privatization process.

"The privatization will be pushed further to next year," Santos said.

PPA originally wanted to privatize the terminal by middle of this year after the terms were approved by its board in February. The state firm, however, had to start from square one after the Philippine Chamber of Commerce and Industry, which sits at the PPA Board as the private sector representative, backtracked on its own proposal to have several operators for the terminal.

The PPA Board then handed down the revised terms, containing a single-operator scheme requested by the PCCI.

Government needs to privatize the North Harbor as PPA does not have the necessary funds to modernize the old facility and make it more competitive.

According to PPA officials, due to the inefficiency of the North Harbor, many of its customers are transferring to nearby ports, such as those operated by Asian Terminals, Inc.

PPA data showed there was a continuous drop in cargo volume at the North Harbor starting 2003. From 16.44 million metric tons in 2003, cargo volume dropped to 16.32 million metric tons in 2004 then to 12.82 million metric tons last year.

Container volume also dipped to 578,615 TEUs in 2005 from the previous year’s 665,694 TEUs, and 718,984 TEUs in 2003.

Ship traffic also declined with 4,501 vessels calling North Harbor for 2005 from 6,292 vessels in 2004 and 6,393 vessels in 2003.

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