Port operators Asian Terminals Inc. (ATI) and International Container Terminal Services, Inc. (ICTSI) have filed petitions with the Philippine Ports Authority (PPA) for cargo-handling rate increases at Manila South Harbor and Manila International Container Terminal (MICT), respectively.
ATI is requesting an 8.7% increase in cargo-handling tariff for containerized and non-containerized cargoes at Manila South Harbor, and ICTSI an 8.72% hike in cargo-handling tariff at MICT.
Under their contracts with PPA, both terminal operators are allowed to file for a rate increase every two years. The last cargo-handling tariff rate adjustment was in 2015, when PPA granted an 8% rate increase.
For ATI, the proposal would translate to roughly P780 in additional charge for a twenty-foot equivalent unit (TEU) import for both stevedoring and arrastre, ATI assistant vice president for business development Edward Ian Baking said in a public hearing presentation on March 20.
For MICT, the proposed rates are US$107.15 for a full TEU from the current $98.56; $90.07 per empty TEU from the current $82.85; P4,375.98 for a TEU of full container load (FCL) from the current P4,025 per TEU of FCL; and P3,572.54 per TEU of less than container load (LCL) from the current P3,286.
Baking said ATI had filed for a petition for a rate increase in December 2017, but filed it again early this year following the issuance of PPA Administrative Order (AO) No. 02-2018. The AO prescribes new standard and uniform formula and procedures for cargo-handling tariff adjustment.
ICTSI filed its petition in November last year and again last March 8.
New formula for adjustment
Under AO 02-2018, which took effect on March 8, the cargo-handling/terminal operator may apply for a cargo-handling tariff adjustment if the consumer price index (CPI) has increased by at least 5% within a three-year period.
READ: PPA order sets formula for cargo-handling tariff adjustment
CPI, computed and provided by the Philippine Statistics Authority (PSA), is a statistical measure of the average retail pricing of goods and services commonly purchased by a particular group of people in a particular area.
PPA said AO 02-2018 was issued to ensure integrity and accuracy in the application of adjustment of cargo-handling tariff, as well as transparency and comprehensive deliberation during the conduct of public hearings.
Both ATI and ICTSI said CPI had increased during the period 2014-2017.
MICT management services and government affairs director Voltaire Wycoco, in a presentation during the public hearing, said CPI (all items) in the Philippines increased 7.54% from P140.50 in December 2014 to P151.10 in December 2017.
CPI (all items) for National Capital Region likewise rose 8.72% from P130.70 in December 2014 to P142.10 in December 2017, he said.
Both terminal operators said they are eligible for tariff adjustment after having complied with the requirements of AO 02-2018.
The AO states that the cargo-handling/terminal operator must have fully complied with its contractual commitments; have no outstanding obligation due to PPA; have fully complied with the cargo-handling compliance report; and have complete and timely submission of the engineering, operational, and audited financial reports.
ATI and ICTSI also presented investments and projects that have already been completed or are ongoing, in compliance with their contracts.
Baking said that based on ATI’s computation using data from PSA and Department of Trade and Industry, the effect of the requested 8.7% increase in cargo-handling tariff would be “very marginal.”
He said that for sugar, the increase would only be 0.07%, or P0.04 additional cost per unit of sale; for rice 0.08% or P0.4; for flour 0.13% or P0.99; and for cement 0.44% or P0.99.
Stakeholder organizations present during the March 20 public hearing all said they will just submit their position papers on the terminal operators’ petition. Port union groups at the hearing signified their support for the petition.
The PPA hearing panel has given stakeholders 10 calendar days after the public hearing, or until March 30, to submit their position papers. ATI and ICTSI, meanwhile, have three days to respond after receiving the position papers.
Under AO 02-2018, the hearing panel will evaluate the documents submitted and file its recommendations with the PPA Board within seven calendar days. Approval of the adjustment of cargo-handling tariff “is vested with the PPA Board of Directors,” AO 02-2018 notes. . – Roumina Pablo
