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The Philippine Ports Authority will resume bidding out contracts for various ports, including for General Santos, by the second half of the year, according to PPA general manager Jay Daniel Santiago
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The bidding will be under the PPA Port Terminal Management Regulatory Framework after the election ban is lifted in June and once its revised policy on PTMRF is issued
The Philippine Ports Authority (PPA) will resume bidding out contracts for various ports, including for General Santos, by the second half of the year, according to PPA general manager Jay Daniel Santiago.
The bidding will be under the Port Terminal Management Regulatory Framework (PTMRF)—PPA’s guidelines in the awarding of port terminal management contracts—after the election ban is lifted in June and once the revised policy on PTMRF is issued, Santiago told media at a recent chance interview.
PPA last year placed on hold the bidding of port contracts under PTMRF pending revision of the policy to comply with implementing rules and regulations (IRR) of Republic Act No. 11966 (PPP Code of the Philippines) which took effect in April 2024.
“We’re doing the revisions so that when we start bidding out the terminals, (revisions) will already be compliant with the new PPP Code and its IRR,” Santiago said.
He admitted the agency will be lucky if it can bid out two to three ports before yearend.
PPA assistant general manager for operations Mark Jon Palomar last year said PPA already submitted its proposed revised policy to the Office of the Government Corporate Counsel (OGCC) for compliance check against the PPP Code’s IRR. OGCC provides legal service to government-owned and controlled corporations such as PPA.
Among ports PPA eyes to bid out this year is General Santos, which will be under Tier 2 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.
Other ports that may be bid out this year will be under Tier 3, in which the contractor handles above-ground fixtures and mobile-handling equipment for a 15-year concession period.
Since PPA started bidding out port terminal management contracts under PTMRF, it had already bid out around 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, which is a full concession.
Santiago earlier said implementation of the PTMRF is PPA embarking on the process of splitting its regulatory and operational functions by privatizing the operations of ports.
Several industry stakeholders and business groups have for years been 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, “no government share is being collected” but there is a minimum concession fee to be remitted by the concessionaire for the duration of the concession, which meant even if there is a request for an increase in 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.”
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
