ICTSI submits lone bid for Iloilo port but falls short of requirements

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ICTSI submits lone bid for Iloilo port but falls short of requirements
Iloilo Commercial Port Complex.
  • International Container Terminal Services, Inc. emerged as the sole bidder for the management of Iloilo Commercial Port Complex
  • Its bid was, however, declared “failed” due to the lack of a notarized Secretary’s Certificate or any document showing proof of authorization 
  • It may seek for reconsideration until December 21
  • Other eligibility criteria, including technical and financial requirements, were met
  • Iloilo Commercial Port Complex’s operations, under the 25-year contract, will be exclusive to foreign vessels and cargoes for the first five years

International Container Terminal Services, Inc. (ICTSI) emerged as the sole bidder for the 25-year cargo-handling contract at the Iloilo Commercial Port Complex (ICPC).

But the Philippine Ports Authority (PPA) Bids and Awards Committee deemed ICTSI’s bid as “failed” due to the absence of a notarized Secretary’s Certificate or any document showing proof of authorization attached in the Omnibus Sworn Statement, a legal requirement.

All other eligibility criteria, including technical and financial requirements, intended working capital, and the port development plan were met.

The company has until December 21 to request reconsideration of its bid.

READ: PPA bids out 25-year contract for Iloilo port

During the bid opening on December 18, ICTSI, the only company to obtain bid documents, submitted its proposal under the management and operation of ICPC, the first port that the PPA is bidding out under Tier 1 of its Port Terminal Management Regulatory Framework (PTMRF).

Prior to the PTMRF bidding, ICTSI in 2019 submitted an unsolicited proposal to invest over P5 billion to develop ICPC and the Port of Dumangas. The proposal was withdrawn in 2022 due to concerns about prolonged processes. PPA opted for PTMRF, perceived as a quicker alternative by PPA general manager Jay Daniel Santiago.

READ: ICTSI proposal for Iloilo ports meets PPA requirements

Under the contract, ICPC operations will exclusively serve foreign vessels and cargoes. For the first five years, domestic vessels and cargoes are permitted until the Fort San Pedro port development turnover. Fort San Pedro, previously bid under PTMRF Tier 3, serves as the designated domestic terminal.

The contract specifies a minimum fixed concession fee of P500 million for the sixth to tenth year, with an annual fee of P100 million for the sixth year. Fees exclude taxes.

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

For the first five years, the winning bidder must remit 20% of annual gross revenues to PPA. From the sixth to tenth year, a fixed annual concession fee applies, followed by incremental increases based on the consumer price index every three years from the eleventh year onward.

In addition to the yearly concession fee, a 20% variable fee will be remitted to PPA if the actual traffic volume exceeds the volume threshold by 10%. The variable fee for the sixth year is based on the highest throughput from the initial five years. A minimum working capital of P51 million is required.

Interested bidders for the project must have at least two years of experience in providing port terminal/cargo-handling services, or other related port services, as indicated in completed and ongoing contracts.

Interested bidders must also have experience in operating a terminal that is of similar or greater size than ICPC. This experience must show the bidder handled foreign containerized and non-containerized cargo for a minimum of 10 years.

They must have experience in undertaking similar rehabilitation and construction works that it proposes to undertake as part of its proposed port development plan.

Prospective bidders must also not be engaged in any business activity, whether primarily or otherwise, which will prevent it from properly and sufficiently discharging its contractual obligations. This prohibition covers entities engaged in maritime transportation.

ICPC bidding follows the non-discretionary pass/fail criterion outlined in PPA Administrative Order No. 12-2018, as amended. The order ensures competitive and transparent selection of port terminal management contracts under the PTMRF.

PTMRF, introduced in AO 03-2016, aims to enhance port services by involving the private sector. It organizes port investments into three tiers for clearer arrangements. As of 2020, PPA has auctioned 19 Tier 3 ports (15-year concession), one Tier 2 port (20-year concession), and is currently bidding two clusters of Tier 3 ports.

ICPC falls under Tier 1, granting a 25-year full concession. Tier 1 ports, designed to attract investors, feature higher tariffs, ensuring the presence of necessary infrastructure and equipment.

During a public meeting on June 21, the PPA Port Management Office (PMO)-Panay/Guimaras, overseeing ICPC, highlighted the port’s outdated equipment, hindering efficiency.

This limits ICPC’s ability to fully utilize its yard and berth capacity. Additionally, the outdated infrastructure prevents direct shipping between Iloilo and international locations, leading to costly and inefficient container handling.

ICPC has not effectively served international shipping or handled containerized cargo, rendering it an underutilized investment. PMO Panay/Guimaras suggests ICPC has potential for expansion, with its current three berths covering 627.9 meters across 23 hectares. – Roumina Pablo