PPA bids out 25-year contract for Iloilo port

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Iloilo Port Commercial Complex. Photo from Philippine Ports Authority.
  • The Philippine Ports Authority is seeking bids for a 25-year contract to operate cargo-handling and related services in Iloilo Commercial Port Complex
  • The contract requires a minimum fixed fee of P500 million for the sixth to 10th year, and a P100-million fixed fee for the sixth year
  • Iloilo Commercial Port Complex will exclusively serve foreign vessels and cargoes
  • Domestic traffic will be allowed during the initial five years of the contract or until they transition to Fort San Pedro port
  • Winning bidder must construct a 250-meter berth, upgrade the container yard for partial rubber-tired gantry operations, and provide necessary cargo-handling equipment
  • A pre-bid conference is set on December 1 while the deadline of submission of bids, as well as the opening of bids, will be on December 18

The Philippine Ports Authority (PPA) is bidding out the 25-year contract to manage and operate cargo-handling and related services in Iloilo Commercial Port Complex (ICPC) in Iloilo City.

PPA published an invitation to bid on November 23 for the port which will be exclusive to foreign vessels and cargoes. Domestic vessels and cargoes will, however, be allowed in the first five years of the contract or until completion of the port development project at Fort San Pedro port, designated as the domestic terminal.

The contract has 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. These fees exclude taxes.

ICPC is the first port PPA is bidding out under Tier 1 of its Port Terminal Management Regulatory Framework.

READ: PPA rolls out proposed P5.9B plan for Iloilo port complex

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

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.

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

Interested bidders must have at least two years of experience in port terminal/cargo-handling services and demonstrate experience in operating a terminal of similar or greater size, handling foreign containerized and non-containerized cargo for at least a decade. They must also showcase experience in similar rehabilitation and construction works proposed in their port development plan.

Bidders cannot be involved in any business that would hinder them from fulfilling their contract duties, especially in maritime transportation.

Bidding will follow open competitive procedures outlined in PPA Administrative Order No. 12-2018. A pre-bid conference is scheduled for December 1, with the submission and opening of bids set for December 18.

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