THE Supply Chain Management Association of the Philippines (SCMAP) has joined calls to remove the 5% concession fee on ancillary services provision from the new North Harbor port contract.
In a letter to the Philippine Ports Authority (PPA), SCMAP president Dennis Llovido said the fee will lead to higher shipping cost, which will only be passed on to customers.
“Ancillary services represent a large share of ship operating cost,” Llovido said. “The additional fees will cause the North Harbor to be less competitive versus other ports in Luzon. On a macroeconomic scale, this will reduce the competitiveness of the Philippines.”
The association is instead asking that a fixed permit to operate fee — the usual fee in other ports — be considered.
Counting more than 100 companies as members including San Miguel Corp, Johnson & Johnson, CDO-Foodsphere, Unilever, PLDT and Smart, SCMAP represents the biggest group of shippers using the North Harbor.
Earlier, the Department of Trade and Industry (DTI) also asked PPA and new North Harbor operator Manila North Harbour Port, Inc (MNHPI) to reconsider the imposition of the concession fee and instead adopt the annual permit to operate fee.
“To impose a 5% concession fee on bunkering services alone could trigger higher cargo freight rates and passenger fares for vessels using the North Harbor,” DTI undersecretary Zenaida Maglaya said in a letter to PPA general manager Atty. Oscar Sevilla.
Under MNHPI’s 25-year North Harbor management and operations contract, the imposition of the 5% concession fee is allowed but subject to Joint Resolution No. 01-2010 adopted by PPA and MNHPI. The resolution resolved that the fee “covers service providers that may be allowed by MNHPI to occupy and/or use the Passenger Terminal Buildings (PTBs) and/or other facilities which may be put up at the Manila North Harbor.”
The Philippine Liner Shipping Association is, however, against the resolution because the phrase “and/or other facilities that may be put up at the Manila North Harbor” may be interpreted as covering the whole pier, terminal and container yard, and therefore all service providers will practically be covered by the concession fee.
