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The Philippine Ports Authority expects a 600% increase in revenues under its new port terminal management contracts scheme
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Under the Port Terminal Management Regulatory Framework, winning contractors remit to PPA a periodic concession and/or management fee or a variable fee, which may increase periodically
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Since last year, PPA has bidded out 11 port terminal management contracts under the PTMRF
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PPA is looking to bid out at least 10 more contracts before end of the current administration
The Philippine Ports Authority (PPA) estimates an increase of around 600% in revenues under the newly implemented port terminal management contracts scheme.
PPA since last year has been bidding out 15-year port terminal management contracts under the Port Terminal Management Regulatory Framework (PTMRF).
“Government revenues from this new framework will increase by around 600% compared to the revenues earned by the government from previous cargo handling contracts awarded in PPA terminals during past administrations,” PPA general manager Jay Daniel Santiago said in a statement.
Under the PTMRF, winning contractors should remit to PPA a periodic concession and/or management fee or a variable fee, which may increase periodically.
“The main objective of the PTMRF is to adopt fairer and more transparent concession contracts for the operation of PPA terminals that will provide better service to port users as well as ensure that dockworkers receive fair and just compensation for their work as well as a safe working environment,” Santiago said.
It will also “significantly” professionalize and upgrade the level of service in our ports, Santiago added.
PTMRF, embodied under PPA Administrative Order (AO) No. 03-2016 issued in 2016, seeks to provide higher quality of port services by promoting greater private sector participation.
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, making it easier to determine investment arrangements of a port.
Moreover, concessions will be performance- or outcome-based, instead of investment-based or based on the number of equipment or facilities to be provided by the concessionaire.
In 2018, PPA issued AO 12-2018, which provides guidelines for the selection and award of contract under the PTMRF.
In 2019, PPA AO 10-2019 was issued providing uniform port tariffs that will be the base tariff for operators winning contracts categorized as Tier 3 under the PTMRF. A 2019 public hearing noted the proposed tariff was based on Cagayan de Oro port’s rates, the highest among PPA ports.
PPA has so far been bidding out contracts for Tier 3 ports. Under this tier, PPA handles the physical undersea and landside infrastructure (capital investment, wharves, piers, reclamation, dredging) while the contractor invests on above-ground fixtures and semi-fixtures and mobile handling equipment (e.g. passenger terminal building, cranes, forklifts, trucks).
Since last year, PPA has been bidding out 11 port terminal management contracts. Nine contracts have been awarded for the ports of Ormoc, Puerto Princesa, Calapan, Legazpi, Tabaco, Iligan, Ozamiz, Zamboanga, and Tacloban. Winning bidders for the ports of Calapan, Legazpi, Ozamiz and Zamboanga have already taken over.
READ: 2 firms win 9 PPA port management contracts
Earlier, Santiago said PPA is looking to bid out at least 10 more contracts before the end of the current administration.
Santiago, meanwhile, assured the security of tenure and income of dockworkers who may be affected by the change in terminal operator under PTMRF.
In a Senate hearing on September 30, he noted that under the policy, the winning bidder can absorb and hire the qualified dockworkers from the previous cargo-handling service provider.
The clarification came after Senator Risa Hontiveros inquired about the status of dockworkers at Calapan port, whose new port operator took over last July after winning the PTMRF bidding.
READ: Calapan port back in business after turnover standoff
The staff of the old cargo-handling service provider, Calapan Labor Service Development Cooperative (CALSEDECO), had refused to leave the port to make way for the takeover, requesting PPA to wait for the court to resolve a case it filed against the port authority in June. CALSEDECO staff departed the port later in the day and port operations resumed.
Santiago said the new port operator, Prudential Customs Brokerage Services, Inc., has already absorbed and hired the dockworkers of CALSEDECO. – Roumina Pablo
