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The government policy on private port development, construction, operation, and maintenance has been overhauled
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Among key changes effective July 19: there will be just two types of private ports – commercial and non-commercial, according to PPA Administrative Order No. 05-2022
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The revised policy also requires applications for private port permit to be processed within 20 working days, from about 14 weeks currently
The Philippine Ports Authority (PPA) has revised its policy on the development, construction, operations, and maintenance of private ports.
Among key changes effected under PPA Administrative Order No. 05-2022: there will now be only two types of private ports – commercial and non-commercial.
Effective July 19, the policy revision follows PPA’s proposal last year of a revision “designed to be mutually fair and beneficial to both the PPA and its stakeholders”.
The revision is also meant to streamline the process as the private sector plays a vital role in economic development through public-private partnerships in priority sectors such as ports, PPA said. Two public hearings were conducted for the proposed policy.
AO 05-2022 governs procedures on the development, construction, operations and maintenance, expansion, rehabilitation, registration of existing private ports and their turnover to PPA’s jurisdiction. It also covers the applicable fees, fines, and penalties to be imposed on private ports.
A private port is a port facility constructed and owned by a private person or entity as authorized by the government.
The policy does not cover energy-related port projects, marinas, and port facilities for recreational boats and similar watercraft.
Under AO 05-2022, all private port applicants should not have a pending case against PPA, its Board, technical working group, or any of its offices, and have no outstanding obligations with the ports authority.
From July 19, there will be only two types of private ports – commercial and non-commercial. Previously, the category included marinas and river ports.
The new private port operation policy provides a list of documentary requirements for each type of application, while the previous rules were based on PPA AOs 06-95 and 03-2013.
The following are the types of private port applications that PPA may issue:
- Permit to develop and construct
- Certificate of registration (COR)
- Permit to improve/rehabilitate/expand
- For change of name and/or conveyance of COR/port facilities
- Request for conversion of non-commercial to commercial private port
- Request for registration of existing private port without any valid permit issued by PPA
- Request for conversion of non-commercial to commercial private ports
- Permit to operate (PTO) inside Zone of Significant Interest of the registered private ports
- Provisional authority to operate private ports turned over to government
On processing time, all applications for private port permits must be processed within 20 working days in compliance with the Ease of Doing Business and Efficient Government Service Delivery Act of 2018. PPA earlier said the current processing of application may take 14 weeks based on its computation.
PPA will issue a separate memorandum circular that provides for the procedures in applying for private port permits within 30 days from the effectivity of AO 05-2022.
The COR for non-commercial private ports will be valid depending on the following criteria:
- Five years for small-scale port with capital investment of P3 million to P15 million
- 10 years for a medium-scale port with capital investment of above P15 million to P50 million
- 25 years for a large-scale port with a capital investment of above P100 million
For a commercial private port that is considered large-scale and has a capital investment of P100 million, the COR will be valid for 25 years.
Previously, the validity of the COR/PTO is one year, five years, or co-terminus with the lease agreement or foreshore lease contract/miscellaneous lease contract or special use agreement in protected areas.
The private port operator may be allowed to undertake cargo-handling operations either on its own or by contract upon issuance of its COR.
PPA also added a provision requiring a duly registered private owner/operator to secure a PTO if he opts to contract out cargo-handling operations to third-party cargo-handling operators.
For ships docking and cargoes being loaded/unloaded at a registered private port, PPA will collect 50% of the applicable current dockage-at-berth, dockage (domestic), and wharfage fee.
AO 05-2022 noted that private commercial port operators should not in any way effect adjustment of port charges imposed by PPA, and that only the ports authority can adjust the port dues, dockage-at-berth (foreign), dockage-at-anchorage, dockage (domestic), and wharfage.
“The turned-over private port to the government, for which a Permit to Operate was issued to the previous owner/operator, shall be collected 100% port charges,” AO 05-2022 stated. However, the previous owner/operator of a turned-over private port with an existing lease agreement will be assessed and collected 100% port charges for the remainder of its lease term.
A 50% reduction in wharfage and dockage-at-berth will be extended to vessels/cargoes authorized to be diverted to private non-commercial ports on the following instances:
- Due to congestion in the government port
- Due to draft limitation of the government port
- Due to absence of specialized and dedicated cargo-handling equipment and gears in the government port
A 50% reduction in wharfage on cargoes, whether laden/unladen, loaded/discharged at private ports, will be imposed on the following:
- Cargoes of a lessee of a portion of a PPA-registered private port who provided on his own facilities, by/through which such cargoes are moved, and which are not available at a nearby government port.
- Cargoes of independent power producer administrator companies that are covered by a finance lease/s and utilizing a portion of the registered private port.
Private commercial port operators may now increase the cargo-handling charges and other related fees on the landside of private commercial ports once every three years. Previous rules state that no rates or fees should be imposed without prior approval from PPA.
In adjusting upward the cargo-handling charges and other related fees on the landside, private commercial ports operators should use the consumer price index factor formula.
They may also adjust downward the cargo handling charges and other related fees on the landside at any time.
Private ports, consistent with PPA’s port environmental policies and regulations, must ensure they minimize the adverse or negative impact of port activities on the environment. They should also make sure all aspects of port operation and port development must serve to protect and preserve the environment.
Private ports should also adopt measures on climate adaptation, climate change proofing and setting in place disaster countermeasures and disaster mitigation, among others, and should implement green, resilient and smart port strategies to improve environmental sustainability of their operations.
The new private port operation policy also provides a list of violations and its corresponding penalties, which are without prejudice to the filing of criminal case(s). – Roumina Pablo
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