PPA rebids Iloilo port contract

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PPA rebids Iloilo port contract
  • The Philippine Ports Authority is re-bidding the 25-year contract to manage and operate Iloilo Commercial Port Complex in Iloilo City
  • A new invitation to bid was published on December 21 after the lone bid submitted by International Container Terminal Services, Inc. was declared “failed” on December 18
  • Iloilo Commercial Port Complex is the first port to be bid out under Tier 1 (full concession) of the Philippine Ports Authority’s Port Terminal Management Regulatory Framework
  • A pre-bid conference is scheduled on December 29 while the deadline of submission of bids, as well as the opening of bids, is on January 11, 2024

The Philippine Ports Authority (PPA) is re-bidding the 25-year contract to manage and operate Iloilo Commercial Port Complex (ICPC).

The move comes after the bid submitted by the lone bidder, International Container Terminal Services, Inc. (ICTSI), was declared “failed” due to the absence of a notarized Secretary’s Certificate or any document proving authorization attached in the Omnibus Sworn Statement. ICTSI met all other eligibility criteria.

READ: ICTSI submits lone bid for Iloilo port but falls short of requirements

A new invitation to bid was published on December 21, three days after the bid opening.

At stake is the the management and operation of cargo-handling and related services at ICPC, the first port under Tier 1 of its Port Terminal Management Regulatory Framework (PTMRF). A pre-bid conference is set for December 29, with the deadline for bid submission and opening on January 11, 2024.

The contract specifies a minimum fixed concession fee of P500 million for the sixth to tenth year, with an annual fee of P100 million for the sixth year, excluding taxes.

ICPC will exclusively serve foreign vessels and cargoes for the first five years, allowing domestic vessels and cargoes until the Fort San Pedro port development turnover. Fort San Pedro serves as the designated domestic terminal, previously bid under PTMRF Tier 3.

Investment requirements include an internationally-recognized terminal operating system, PPA-owned equipment maintenance, and infrastructure upkeep. The winning bidder must construct a 250-meter berth, upgrade the container yard for partial rubber-tired gantry operations, and provide cargo-handling equipment to meet future demand.

For the first five years, the winning bidder must remit 20% of annual gross revenues to PPA. From the sixth to tenth year, a fixed annual concession fee applies, followed by incremental increases based on the consumer price index every three years from the eleventh year onward.

In addition to the yearly concession fee, a 20% variable fee will be remitted to PPA if the actual traffic volume exceeds the volume threshold by 10%. The variable fee for the sixth year is based on the highest throughput from the initial five years. A minimum working capital of P51 million is required.

Interested bidders must have at least two years of experience in providing port terminal/cargo-handling services and operating a terminal similar or greater in size than ICPC, handling foreign containerized and non-containerized cargo for a minimum of 10 years. Experience in rehabilitation and construction works proposed in the port development plan is necessary.

Prospective bidders must also not be engaged in any business activity, whether primarily or otherwise, which will prevent it from properly and sufficiently discharging its contractual obligations. This prohibition covers entities engaged in maritime transportation.

ICPC bidding follows the non-discretionary pass/fail criterion outlined in PPA Administrative Order No. 12-2018, as amended. The order ensures competitive and transparent selection of port terminal management contracts under the PTMRF.

PTMRF, introduced in AO 03-2016, aims to enhance port services by involving the private sector. It organizes port investments into three tiers for clearer arrangements. As of 2020, PPA has auctioned 19 Tier 3 ports (15-year concession), one Tier 2 port (20-year concession), and is currently bidding two clusters of Tier 3 ports.

ICPC falls under Tier 1, granting a 25-year full concession. Tier 1 ports, designed to attract investors, feature higher tariffs, ensuring the presence of necessary infrastructure and equipment.

During a public meeting on June 21, the PPA Port Management Office (PMO)-Panay/Guimaras, overseeing ICPC, highlighted the port’s outdated equipment, hindering efficiency.

It limits ICPC’s ability to fully utilize its yard and berth capacity. Additionally, the outdated infrastructure prevents direct shipping between Iloilo and international locations, leading to costly and inefficient container handling.

The port, covering 627.9 meters across 23 hectares, has not effectively served international shipping or handled containerized cargo, rendering it an underutilized investment. PMO Panay/Guimaras suggests ICPC has potential for expansion. – Roumina Pablo