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Bidding for port contracts, including for General Santos, may resume before yearend, according to the Philippine Ports Authority
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PPA placed on hold the bidding of port contracts under the Port Terminal Management Regulatory Framework
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The policy is being revised to comply with implementing rules of Republic Act No. 11966 (PPP Code of the Philippines) that took effect last April
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PPA general manager Jay Daniel Santiago said they hope to approve and publish the revision by September or October
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General Santos be will be bid out under Tier 2 while the other ports will be under Tier 3 of the PTMRF
Bidding for port contracts, including for General Santos, may resume before yearend, according to Philippine Ports Authority (PPA) general manager Jay Daniel Santiago.
PPA placed on hold the bidding of port contracts under its Port Terminal Management Regulatory Framework (PTMRF) as it is revising the policy to comply with implementing rules and regulations of Republic Act No. 11966 (PPP Code of the Philippines) that took effect last April, Santiago said during a press briefing last week.
He hopes the PPA Board will approve the revisions and that they will be published by September or October, making the conduct of bidding possible within the year.
The PPA chief said they aim to bid out at least 10 port contracts this year, including General Santos, and clusters of ports in Oriental Mindoro, Occidental Mindoro, and Romblon.
Prior to putting on hold the biddings under PTMRF, PPA had bid out port clusters, including the ports of Tablas (Odiongan) and Carmen in Romblon; Romblon and Ambulong in Romblon; and Balingoan and Jasaan in Misamis Oriental. Biddings for those ports, however, were declared failed.
READ: PPA declares failure of bidding for Romblon ports; Bidding for clustered Misamis ports fails anew
General Santos will be bid out under Tier 2 while the other ports will be under Tier 3 of the PTMRF.
Under the PTMRF, embodied in PPA Administrative Order (AO) No. 03-2016, as amended by AO 03- 2023, contractors for Tier 2 ports handle the physical land infrastructure, above-ground fixtures and semi-fixtures, and mobile-handling equipment while PPA handles physical undersea infrastructure for a 20-year concession period.
For Tier 3 ports, the contactor handles above-ground fixtures and mobile-handling equipment for a 15-year concession period. Tier 1, meanwhile, is a 25-year full concession.
Since PPA started bidding out port terminal management contracts under PTMRF, it had already bid out 20 ports, mostly under Tier 3 except for Davao port under Tier 2 and Iloilo Commercial Port Complex (renamed Visayas Container Terminal) under Tier 1.
Santiago earlier said implementation of the PTMRF has PPA embarking on the process of splitting its regulatory and operational functions by privatizing the operations of ports.
READ: PPA already splitting regulatory and operation roles, says GM
Several industry stakeholders and business groups have for years been requesting and recommending the separation of PPA’s functions, citing conflict of interest and saying exercising both functions “unnecessarily increases logistics costs.”
Stakeholders said the policies allowing PPA to get a share from cargo-handling revenues constitute a “conflict of interest” as the regulator “now benefits from its own regulation” and hence provides the regulator “the incentive to increase the rate to improve its financial health.”
PPA Port Operations and Services Department manager Atty. Ma. Asuncion Hiyasmin Delos Santos earlier explained that under the PTMRF, “there is no government share being collected” but there is only “minimum concession fee” to be remitted by the concessionaire for the duration of the concession.
“So even if there is a request for approval of [increase of] rates, PPA will not benefit from that because the concession fee has been defined already in the terms of reference and also in the contract of the port terminal management operator,” Delos Santos said.
Under AO 03-2016, the contactor should remit to PPA a periodic concession and/or management fee and a variable fee as specified in the agreement between the ports authority and the contractor. The concession and/or management fee will be increased periodically, subject to a pre-established formula to be determined by PPA.
Should actual traffic volumes exceed certain pre-determined amounts in any given period during the agreement, the contractor should also remit a variable fee to PPA. – Roumina Pablo
READ: PPA revises policies for awarding of port terminal contracts
