Big players expected to bid for Iloilo port contract

Big players expected to bid for Iloilo port contract
Philippine Ports Authority general manager Jay Santiago at the December 4 press briefing held at the PPA head office in Manila. Photo from PPA.
  • One company purchased bid documents for a 25-year contract to manage cargo services at Iloilo Commercial Port Complex
  • Philippine Ports Authority’s Jay Daniel Santiago anticipates only familiar contenders will join the bidding, given the stringent criteria
  • If a qualified bid occurs on December 18, post-qualification will take about 30 days, with the contract awarded by February 2024 at the latest

Philippine Ports Authority (PPA) general manager Jay Daniel Santiago expects “big players” to join the December 18 bidding for the management of the Iloilo Commercial Port Complex (ICPC).

In a press briefing on December 4, Santiago said companies anticipated to bid for the 25-year contract to manage and operate cargo-handling and related services in ICPC include International Container Terminal Services, Inc., Asian Terminals Inc., Harbour Centre Port Terminal, Inc., and Globalport Terminals Inc.

“I think, considering the magnitude of the terminal, perhaps only the big ones will be interested,” he said.

One firm has already purchased bid documents. The identity of the firm was not revealed.

ICPC is the first port being bid out by PPA under Tier 1 (full concession) of its Port Terminal Management Regulatory Framework (PTMRF).

The bid documents specify that interested parties must possess a minimum of two years of experience in port terminal/cargo-handling services, demonstrate experience in operating a terminal of similar or greater size for at least a decade, and showcase expertise in similar rehabilitation and construction works proposed in their port development plan.

The minimum working capital required to sufficiently meet day-to-day operational needs of the port is P51 million.

Santiago said that, assuming there will be a qualified bid on December 18, post-qualification will take about 30 days and awarding of the contract will be no later than the end of February 2024.

PPA published an invitation to bid for ICPC on November 23, with a pre-bid conference on December 1, and the deadline for bid submission and opening set for December 18.

ICPC will be exclusive to foreign vessels and cargoes. Domestic vessels and cargoes, however, will be allowed in the initial five years of the contract or until completion of the port development project at Fort San Pedro port, which has been designated as the domestic terminal.

The contract specifies a minimum fixed concession fee of P500 million for the sixth to 10th year, with a P100-million annual concession fee for the sixth year, excluding taxes.

The winning bidder must invest in an internationally-recognized terminal operating system, maintain PPA-owned equipment and infrastructure, construct a new 250-meter berth, upgrade the container yard for partial rubber-tired gantry operations, and provide necessary cargo-handling equipment to meet future demand.

For the first five years of the concession period, the winning bidder must remit a 20% share of its annual gross revenues to PPA, followed by a fixed annual concession fee from the sixth to 10th year. From the 11th year onwards, the concession fee will increase based on the consumer price index.

A 20% variable fee will also be applied if the actual traffic volume exceeds the volume threshold by 10%, with the fee for the sixth year based on the highest throughput from the first five years.

Bidders are prohibited from engaging in any business that may hinder them from fulfilling their contract duties, especially in maritime transportation. The bidding process will adhere to the open competitive procedures outlined in PPA Administrative Order No. 12-2018.

PPA’s PTMRF, introduced under AO 03-2016, aims to enhance port services through private sector participation, categorizing investments into three tiers. ICPC falls under Tier 1, offering a 25-year full concession with higher tariffs to attract investors.

In a June 21 public consultation, the PPA Port Management Office Panay/Guimaras, which oversees ICPC, noted the port’s current lack of modern equipment hampers productivity and limits its international shipping potential. The port, with three berths totaling 627.9 meters and 23 hectares, will likely benefit from berth and yard expansion. – Roumina Pablo