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The Philippine Ports Authority is negotiating renewal of cargo-handling/terminal contracts of PCBSI Port Terminal Management Corp. and Oroport Cargo Handling Services, Inc. for the ports of Dapitan and Cagayan De Oro, respectively
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Both PCBSI and Oroport passed the pre-qualification requirements
The Philippine Ports Authority (PPA) is negotiating the terms for the renewal of cargo-handling/terminal contracts for the ports of Dapitan and Cagayan De Oro, according to PPA general manager Jay Daniel Santiago.
PCBSI Port Terminal Management Corp. has been the cargo-handling operator of Dapitan since 2000 while Oroport Cargo Handling Services, Inc., has been operating the Cagayan De Oro port since 2004.
Both passed the pre-qualification requirements and are now “negotiating the terms of renewal,” Santiago told PortCalls in a chance interview.
If the outcome of negotiations is acceptable to PPA and the cargo-handling operators, the new terms of the contracts will be elevated to the PPA Board for approval.
If not, PPA will bid out the contracts.
Santiago said decisions should be made within the year, as provided in the timelines under PPA Administrative Order (AO) No. 007-2023, which provides the ports authority’s new guidelines on the renewal of existing contracts on seaport terminal management services. PPA previously did not have a provision for the renewal of contract.
READ: PPA issues guidelines for terminal contract renewals
PCBSI and Oroport both submitted their applications in December 2023 pursuant to AO 007-2023, which provides the ports authority’s new guidelines on the renewal of existing contracts on seaport terminal management services.
READ: Cagayan de Oro, Dapitan cargo handlers seek renewal of contracts
Oroport’s contract for Dapitan port in Zamboanga was issued on January 15, 2010 and will expire after December 15, 2024, while PCBSI’s contract for Cagayan De Oro port was awarded on September 6, 2016 valid until September 5, 2026.
Both operators said they meet the criteria under AO 007-2023, which was adopted and prescribed as part of PPA’s mechanism to determine the qualifications and establish the procedure for the evaluation of all applications for renewal of existing contracts on seaport terminal management services in all government seaports under PPA’s jurisdiction, subject to certain limitations and criteria.
The guidelines are pursuant to changes under Republic Act (RA) No. 11659, or the Amended Public Service Act, and its implementing rules and regulations (IRR). Under the law, which relaxes foreign ownership restrictions in certain industries, seaports remain as public utilities.
Under AO 007-2023, a holder of a valid and existing contract or agreement for the provision of seaport terminal management services in a particular seaport terminal may apply for renewal of contract, provided that all 11 criteria are met.
Part of the criteria is that the concessionaire must possess all the qualifications and none of the disqualifications provided for under RA 11659 and its IRR, including, but not limited to, the nationality requirement.
The concessionaire must also have exhibited exemplary record in the delivery of services at the subject seaport terminal in accordance with its current contract and latest relevant performance audit, and must have made substantial investments on infrastructure, technology or equipment for its operations under its existing contract.
The concessionaire must also be compliant with revenue or remittance commitments under the current contract or agreement, and with no outstanding obligations, financial or otherwise, with PPA.
Further, the concessionaire should not have a pending case against the PPA or any of its directors or officers, in their official capacity, in any court of law or administrative body.
Another criterion for renewal is that the contract or agreement is valid and existing at the time of filing of the application to renew the same. It does not cover holdover authorities since they do not have an existing contract.
In applying for the renewal of contract, AO 007-2023 states that the concessionaire pay a non refundable application fee of P1 million, exclusive of value-added tax, upon the filing of the application.
The Committee on Seaport Terminal Management Contract Renewal, chaired by PPA assistant general manager for finance, legal and administration Elmer Nonnatus Cadano, will evaluate whether or not the concessionaire is qualified for a renewal of its contract.
The Committee may recommend either returning the application if the concessionaire is found to be unqualified for renewal, or commence with the negotiation of the terms and conditions of the renewal of contract if the concessionaire is found to be qualified.
In case the concessionaire is qualified, the negotiation for the terms and conditions for the renewal of contract within 60 days will commence from the day of approval of the general manager.
If the Board disapproves, and the Committee and the concessionaire fail to agree on mutually acceptable terms and conditions one year prior to the expiration of the existing contract, all negotiations will automatically cease. – Roumina Pablo
