Cagayan de Oro, Dapitan cargo handlers seek renewal of contracts

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Cagayan De Oro port. Photo from PPA-Port Management Office Misamis Oriental/Cagayan De Oro's website.
  • Cagayan de Oro and Dapitan cargo-handling operators Oroport Cargo Handling Services, Inc. and PCBSI Port Terminal Management Corp. have respectively applied for renewal of their contracts with the Philippine Ports Authority
  • The PPA in two separate notices posted on its website on April 8 gave concerned parties five calendar days from the posting to submit comments on the renewal applications

Cagayan de Oro and Dapitan cargo-handling operators Oroport Cargo Handling Services, Inc. and PCBSI Port Terminal Management Corp. have respectively applied for renewal of their cargo-handling/terminal management contracts with the Philippine Ports Authority (PPA).

PCBSI and Oroport both submitted their applications in December 2023 pursuant to PPA Administrative Order (AO) No. 007-2023, which provides the ports authority’s new guidelines on the renewal of contracts on seaport terminal management services.

READ: PPA issues guidelines for terminal contract renewals

PPA in two separate notices posted on its website on April 8 gave concerned parties five calendar days from posting to submit comments on the renewal applications.

Oroport’s contract for Cagayan De Oro port was issued on January 15, 2010 and will expire after December 15, 2024, while PCBSI’s contract for Dapitan port in Zamboanga was awarded on September 6, 2016 and valid until September 5, 2026.

PCBSI has been the cargo-handling operator of Dapitan since 2000, while Oroport has been operating Cagayan De Oro port since 2004.

Both operators said they meet the criteria under AO 007-2023, adopted as part of PPA’s mechanism to determine the qualifications and establish procedure for the evaluation of all applications for renewal of contracts on seaport terminal management services in all government seaports under PPA jurisdiction.

The port agency previously did not have a provision for the renewal of contract.

The guidelines are pursuant to changes under Republic Act (RA) No. 11659, or the Amended Public Service Act, and its implementing rules and regulations (IRR). Under the law, which relaxes foreign ownership restrictions in certain industries, seaports remain as public utilities.

Under AO 007-2023, a holder of a valid and existing contract or agreement for the provision of seaport terminal management services in a particular seaport terminal may apply for renewal of contract, provided that all the 11 criteria are met.

Part of the criteria is that the concessionaire must possess all the qualifications and none of the disqualifications provided for under RA 11659 and its IRR, including, but not limited to, the nationality requirement.

The concessionaire must also have exhibited exemplary record in the delivery of services at the subject seaport terminal in accordance with its current contract and latest relevant performance audit, and must have made substantial investments on infrastructure, technology or equipment for its operations under its existing contract.

The concessionaire must likewise be compliant with revenue or remittance commitments under the current contract or agreement, and does not have any outstanding obligations, financial or otherwise, with PPA.

Further, the concessionaire should not have a pending case against the PPA or any of its directors or officers, in their official capacity, in any court of law or administrative body.

Another criterion for renewal is that the contract or agreement is valid and existing at the time of filing of the application to renew the same. It does not cover holdover authorities since they do not have an existing contract.

In applying for the renewal of contract, AO 007-2023 states that the concessionaire pay a non-refundable application fee of P1 million, exclusive of value-added tax, upon the filing of the application.

The Committee on Seaport Terminal Management Contract Renewal, chaired by PPA assistant general manager for finance, legal and administration Elmer Nonnatus Cadano, will evaluate whether or not the concessionaire is qualified for a renewal of its contract or agreement in accordance with the guidelines.

The Committee may recommend either returning the application if the concessionaire is found to be unqualified for renewal, or commence with the negotiation of the terms and conditions of the renewal of contract if the concessionaire is found to be qualified.

In case the concessionaire is qualified, the negotiation for the terms and conditions for the renewal of contract within 60 days will commence from the day of approval of the general manager. Upon conclusion of negotiations, the contract renewal will be for approval of the general manager, then will be endorsed for evaluation and approval by the Office of the Government Corporate Counsel, before being endorsed to the PPA Board.

If the Board disapproves, and the Committee and the concessionaire fail to agree on mutually acceptable terms and conditions one year prior to the expiration of the existing contract, all negotiations will automatically cease and PPA will start the process for the bidding of the contract in accordance with its Port Terminal Management Regulatory Framework under AO No. 03-2016, as amended. – Roumina Pablo