Home » Breaking News, Maritime, Ports/Terminals » PPA proposes uniform cargo-handling tariff

The Philippine Ports Authority (PPA) is giving stakeholders until September 9 to comment on its proposal adopting a uniform cargo-handling tariff in all port concessions under a new terminal management system.

The proposal cuts to one tariff the current 121 used nationwide, according to PPA Port Pricing Division-Commercial Services Department (CSD) acting division manager Efleda Baje in a presentation during the public hearing on August 30.

PPA general manager Atty Jay Daniel Santiago earlier said the current tariff structure is impractical and needed to be simplified.

The proposed uniform tariff is based on Cagayan de Oro port’s rates, the highest among PPA ports.

The proposal—which excludes ports with existing PPA contracts, such as those in Manila and Batangas and private ports—involves rates for cargo-handling (breakbulk cargoes, bulk cargoes, containerized cargoes, and charges for value-added services); roll-on/roll-off (RoRo) terminal fee; passenger terminal fee; porterage rates; waste reception fee; and line handling fee.

Under the proposal, rates for handling domestic and foreign cargoes will be the same and cargoes will be reclassified under three categories from the existing 10.

Baje said that under the current tariff structure, cargo classification varies per port, and non-prime commodities are charged higher than prime commodities.

She explained the non-uniform way of charging “often leads [to] confusion,” and that arrastre rates for handling conventional export cargoes in Manila are discounted by 18.30% while conventional export cargoes in Visayas and Mindanao are not.

Under the proposal, stevedoring will become the only nomenclature used for all works performed on board a vessel and at the dock, pursuant to Section IV, item g.g., of PPA Administrative Order No. 03-2016. This means that under the proposed new tariff structure, arrastre will be part of the stevedoring rate.

PPA will issue another guideline for the collection of rates under the proposed uniform tariff.

Once approved, implementation of the new tariff structure will be rolled out gradually, with initial implementation in the ports of Tabaco and Ormoc.

At the public hearing, Philippine Liner Shipping Association (PLSA) executive director Rona Gatdula opposed the plan on account of “the manner by which the uniform tariff has been computed.”

Gatdula noted that “asking for all these increases, especially in the outports, would really be not acceptable to our clients, or to our shippers.”

She added that domestic carriers are already facing many challenges, especially with impending implementation next year of an International Maritime Organization policy that will also increase operating costs. IMO requires all ships to use lower sulphur fuel starting January 1, 2020.

Gatdula questioned the basis for the rates, and asked for a comparative presentation between existing rates and proposed rates.

She said a uniform rate may defeat the purpose of setting tiers, which have different infrastructure investments and service requirements.

She also noted there are other bases for rate-setting, such as volumes handled by a certain port and types of cargoes. Moreover, concessionaires can petition for a rate increase after a certain number of years, which Gatdula noted would “defeat the purpose of having a uniform rate.”

Business Development Division-CSD division manager Josephine Napiere said comparing existing and proposed rates would be difficult since there are various rates for ports.

The proposed rate structure will be the base tariff to be used by cargo-handling and terminal operators that will win contracts categorized as Tiers 1 to 5 under PPA’s Port Terminal Management Regulatory Framework (PTMRF).

Embodied under PPA AO No. 03-2016, PTMRF outlines guidelines for awarding terminal management contracts, and prescribes categorizing investments into six tiers to make it easier to determine the investment arrangements of a port.

Tiers 1 to 5 range from a fully private concession to a pure operations and management contract. Ports under Tier 6 are ports fully managed by PPA.

The framework aims to promote private sector participation in port operations in order to provide higher quality service. – Roumina Pablo

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