Home » Ports/Terminals » PPA:Port fee hike bid may be decided in March

THE Philippine Ports Authority (PPA) may take three to four more months before it can decide on the terminal operators' petition to increase cargo handling charges by 23-25%.

In an interview, PPA assistant general manager for Operations Benjamin Cecilio said an independent technical working group (TWG) will evaluate separate petitions filed by Asian Terminals Inc. (ATI) and International Container Terminal Services, Inc. (ICTSI).

The group is composed of representatives from the Maritime Industry Authority (MARINA), departments of Trade and Industry, Public Works and Highways, and Finance, and the National Economic and Development Authority. It is chaired by MARINA deputy administrator for Planning Gloria Victoria J. Ba–as.

MARINA deputy administrator for Planning Gloria Victoria J. Ba–as. Cecilio said the appointment of TWG will save PPA from accusations of favoring an increase just to boost its revenues. "It is very difficult when someone questions government policies when the matter being discussed isÉ whether to increase cargo handling charges
or not," he said in response to Consumer Complaints Center, Inc. president Vicente Gambito's earlier remark about PPA suffering "regulatory capture".

Cecilio said the TWG may call for two or three more public hearings before it can finalize deliberations on the matter. The group's first public hearing was conducted third week of December.

Once finalized, its findings will be presented to the PPA Board, which will then issue a final resolution on the matter. "The group's deliberation may extend until February and the board's discussion may take about a month so we are targeting at least March, if not, April (for) the final decision," he noted.

Cecilio said the PPA has requested ATI and ICTSI to submit more evidence on revenue losses and cost increases to enable the committee to quantify and validate their petitions.

ATI and ICTSI are asking for a 25% hike in cargo handling tariffs to recover their presumed losses in recent months due to the rising fuel, continuing peso depreciation, increasing energy and labor costs, and the general increase in consumer prices.

Cargo handling consists of stevedoring, arrastre, and the off-dock cost of shipping lines or container operators that use container yards apart from the port.

ATI operates containerized cargo shipments at the South Harbor, while ICTSI is the exclusive operator at the Manila International Container Terminal – two of the country's largest and busiest international container gateways.

ATI, in a petition submitted to PPA, reasoned that its cargo handling business, particularly in the South Harbor has been "beset with financial difficulties brought about by various economic, financial and, to some extent, political problems plaguing international and domestic economies."

He said the effects of the peso's fall against the dollar on top of the increasing labor, energy and consumer prices were expected to affect the company's revenues
by 17.5% in 2004 and 25.6% in 2005.

On the other hand, ICTSI noted that the steadily deteriorating foreign exchange rate, the rapidly increasing cost of fuel, labor and benefits, and accelerating inflation are expected to push operating costs from 19% (from January 2002 to end 2004) to 23% toward the end of 2005.

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