ICTSI awarded 25-year contract for Iloilo port

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Artist’s rendition of ICTSI’s vision for Iloilo Commercial Port Complex, to be renamed Visayas Container Terminal. Image from ICTSI.
  • The Philippine Ports Authority awarded International Container Terminal Services, Inc. the 25-year cargo-handling contract for the Iloilo Commercial Port Complex
  • ICTSI will focus on developing a 250-meter berth, upgrading the container yard for partial rubber-tired gantry operations, and investing in state-of-the-art cargo-handling equipment
  • Visayas Container Terminal will be the future name of the facility
  • ICTSI won the contract after it was rebidded
  • In the first bidding, the port operator did not qualify as it lacked a crucial document

The Philippine Ports Authority (PPA) has awarded International Container Terminal Services, Inc. (ICTSI) the 25-year contract to operate and develop the Iloilo Commercial Port Complex (ICPC).

The PPA notice of award was dated January 29 and preceded by the Bids and Awards Committee resolution dated January 26 approving ICTSI’s bid.

The sole bidder for the project, ICTSI’s proposed concession fee of P750 million covering the sixth to the tenth year of the concession period exceeded the minimum fixed amount of P500 million.

ICTSI won the contract after it was rebidded on January 11, 2024. In the first round on December 18, 2023 ICTSI’s lone bid failed due to the lack of one document.

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The contractual terms outline a remittance of 20% of annual gross revenues to PPA for the initial five years, followed by a fixed annual concession fee from the sixth to the tenth year. Incremental increases, based on the consumer price index, will follow every three years thereafter.

“We are elated and grateful to be entrusted with the redevelopment of the Iloilo Port. We recognize the port’s pivotal role in driving Iloilo’s economic and social growth. Our comprehensive proposal outlines significant investments in infrastructure upgrades, cargo-handling equipment, and operational efficiency measures, all aimed at transforming the Iloilo Port into a premier gateway,” ICTSI executive vice president Christian R. Gonzalez said in a statement.

Located at the heart of Iloilo City, ICPC serves the province of Iloilo and the entire Panay Island, in Western Visayas of the Philippines. It is located away from the older port facilities on the Southern coast of Panay Island, in Panay Gulf.  It is one of the country’s safest and most natural harbors with Guimaras Island shielding the port from storms and making it ideal for harboring ships and vessels.

ICTSI said Visayas Container Terminal (VCT), the future name of the facility after handover to the port operator, is a critical gateway for trade in the Western Visayas. However, capacity efficiency constraints have hampered its full potential. ICTSI’s involvement aims to tackle these challenges head-on, unlocking the port’s economic engine, the company noted.

VCT has 627 meters of operational quay length and 20 hectares of land for container and general cargo storage, warehousing, and other cargo-handling activities. Upon signing of the contract, ICTSI said it will focus on improving terminal productivity and service quality by investing in the development and rehabilitation of the terminal infrastructure and the deployment of cargo-handling equipment.

Gonzalez said enhancing the infrastructure of VCT will facilitate a surge in international container ship arrivals and streamline the flow of goods in and out of the port: “I am confident that this strategic move by the PPA, in collaboration with ICTSI, will lead to a revitalized and efficient port complex in Iloilo.”

The port will be operated exclusively to serve foreign vessels and cargoes, with a provision for domestic vessels and cargoes in the initial five years.

Fort San Pedro port will later be designated as the domestic terminal.

ICTSI initially submitted an unsolicited proposal to invest over P5 billion in developing ICPC and the Port of Dumangas in 2019. The proposal was withdrawn in 2022 due to concerns about prolonged processes but ICTSI said its commitment materialized into a long-term partnership, contributing to the revitalization of ICPC.

The PPA later decided to bid out the concession under its Port Terminal Management Regulatory Framework (PTMRF), providing a streamlined and efficient alternative for private sector involvement.

During a public hearing on June 21, 2023 by the PPA Port Management Office-Panay/Guimaras, the outdated equipment at ICPC hindering operational efficiency came to light. This limitation has curtailed ICPC’s full utilization of its yard and berth capacity, leading to costly and inefficient container handling.

With the contract formalized, ICTSI said it will spearhead significant improvements in ICPC’s infrastructure. The focus will include developing a 250-meter berth, upgrading the container yard for partial rubber-tired gantry operations, and investing in state-of-the-art cargo-handling equipment to meet future demand.

The PTMRF framework, introduced in PPA Administrative Order No. 03-2016, has been instrumental in fostering private sector involvement in port services.

ICPC, classified under Tier 1 in the PTMRF, grants a 25-year full concession, offering investors higher tariffs and ensuring the provision of necessary infrastructure and equipment. It is the first port bid out under Tier 1. – Roumina Pablo