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Port bidding

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The Philippine Ports Authority (PPA) is expected to begin bidding out port management contracts next month under its new terminal management policy.

This comes after guidelines—contained in PPA Administrative Order (AO) No. 09-2019-—were issued on the uniform procedure for determining the minimum concession fee and variable fee for contracts under the Port Terminal Management Regulatory Framework (PTMRF).

PPA general manager Atty. Jay Daniel Santiago, in text messages to PortCalls, said the issuance of AO 09-2019 “should trigger the start of the bidding.”

Earlier, Santiago said PPA aims to finalize the new tariff structure before it bids out port projects so the new system can be embedded into port contracts.

PPA has committed to the Governance Commission for GOCCs (GCG)—the agency that oversees government-owned and controlled corporations (GOCC) which includes the port authority—the bidding out of six ports this year. These ports are Tabaco, Ormoc, Legazpi, Surigao (baseport), Puerto Princesa, and Nasipit.

READ: 6 ports for bidding under PPA’s new terminal concession rules

PPA last month also held a public hearing on the uniform tariff it proposes to use as the base tariff when bidding out concessions under the PTMRF.

Asked if bidding should be expected to commence next month so as to comply with the GCG commitment, Santiago replied, “There should be movement by November.”

The PTMRF framework, encapsulated in PPA AO 03-2016 and issued in 2016, outlines guidelines for awarding terminal management contracts. The framework seeks to promote private sector participation in port operations to provide higher quality service and reduce the agency’s administrative burden.

Under AO 03-2016, investments in ports are to be categorized into six tiers, ranging from a fully private concession to a fully PPA-managed port, to make it easier to determine the investment arrangements of a port.

Under the new port terminal framework, concessions will be performance- or outcome-based, instead of based on the investment or the number of equipment or facilities to be provided by the concessionaire.

PPA assistant general manager for operations Hector Miole earlier explained that PTMRF is a “system where a terminal operator handles all the services in the port.”

Under AO 09-2019, the Port Management Office with jurisdiction over the port to be bid out shall be responsible for determining the minimum concession fee and variable fee. The port terminal management contract will be awarded to the eligible bidder that offers the highest concession fee (excluding variable fee) for the duration of the contract.

The base figure, which has been computed using the categories under AO 09-2019, will be escalated per year using the average increase in the gross regional domestic product for the last five years or 5%, whichever is higher, taking into consideration the maximum capacity of the port and the revenue projection. – Roumina Pablo

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