THE Philippine Ports Authority (PPA) is extending International Container Terminal Services, Inc.’s (ICTSI) cargo-handling contract at the Manila International Container Port (MICP) for another 25 years.
ICTSI’s contract expires on 2013 still, but this early the petition, which has already been approved by the PPA Board, is with the Office of the President for signing.
PPA general manager Oscar M. Sevilla told reporters recently the port operator has committed to pour in large amounts of investment to develop the country’s largest container gateway in the next few years. He added the fresh investments will help the port agency raise its revenues and direct income that will be collected from ICTSI alone to new port development initiatives.
"We could not turn down the proposal since they have vowed to provide substantial investments in their petition for extension," Sevilla said. As part of the extended contract, ICTSI will invest heavily in the next four years to further enhance its grip on the increasing international containerized cargo market.
Sevilla said there were also certain conditions which PPA identified in the proposed contract, including shouldering port dredging costs, extension of the current berthing area, and procurement of additional cargo handling facilities. He disclosed ICTSI even agreed to pay PPA higher fees than what it pays now.
The bulk of revenues collected by the PPA comes from ICTSI and South Harbor operator Asian Terminals, Inc. Just recently, the port regulator allowed the two firms to increase their rates for containerized and non-containerized cargoes by 22% and 20%, respectively.
"With these conditions alone, the PPA will reap huge benefits with the contract extension and will be able to finance the development and expansion of ports and terminals using only the fees collected from ICTSI," Sevilla said.