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The Philippine Ports Authority renewed the cargo-handling contract of Oroport Cargo Handling Services, Inc. for Cagayan De Oro port even before it expired
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The contract is being renewed for 10 years, the same arrangement under the original pact
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Meantime, PPA is still negotiating the contract terms of Dapitan port in Zamboanga del Norte with PCBSI Port Terminal Management Corp
The Philippine Ports Authority (PPA) has renewed the cargo-handling contract of Oroport Cargo Handling Services, Inc. for Cagayan De Oro port even before it expired.
The contract is being renewed for the same number of years as the original: 10 years. The contract was issued on January 15, 2010 and will expire after December 15, 2024. Oroport has been operating the Cagayan De Oro port since 2004.
Some development commitments will be added to the new contract though, PPA general manager Jay Daniel Santiago told PortCalls in an interview at the sidelines of PPA’s media briefing on December 6.
READ: PPA negotiating renewal of Dapitan, Cagayan de Oro port contracts
Oroport submitted its renewal application in December 2023 pursuant to PPA Administrative Order (AO) No. 007-2023, which provides the ports authority’s new guidelines on contract renewal for seaport terminal management services.
Aside from Oroport, PCBSI Port Terminal Management Corp. in December 2023 applied for the renewal of its cargo-handling/terminal contract for Dapitan port in Zamboanga del Norte under AO 007-2023. PCBSI’s contract for Dapitan port was awarded on September 6, 2016 and is valid until September 5, 2026.
Santiago said they are still negotiating the terms of the contract renewal with PCBSI, the cargo-handling operator of Dapitan port since 2000. The renewal is also for a period of 10 years. If there will be no agreement, PPA will bid out the contract.
In their application, both Oroport and PCBSI said they meet the criteria under AO 007-2023. That order helps PPA determine qualifications and establish the procedure for evaluation of applications for seaport management renewal contracts in all government seaports under PPA jurisdiction. PPA previously did not have a provision for contract renewal.
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). The law relaxes foreign ownership restrictions on certain industries, but not seaports which remain classified as a public utility thus not open to liberalized foreign ownership.
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 all 11 criteria are met.
Part of the criteria is that the concessionaire must possess all 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 based on its current contract and the 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 comply with revenue or remittance commitments under the current contract or agreement, and must no have 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 contract renewal, AO 007-2023 requires the concessionaire to pay a non-refundable application fee of P1 million, exclusive of value-added tax, upon 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 or agreement in accordance with the guidelines.
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 PPA 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
READ: Cagayan de Oro, Dapitan cargo handlers seek renewal of contracts
