PPA to transform ‘underutilized’ Iloilo Port into world-class facility

By Darwin G.Amojelar

THE Philippine Ports Authority

(PPA) is planning to auction off within the year the Iloilo Commercial Port Complex (ICPC) to transform the “underutilized” port into a world-class terminal facility.

In a public Consultation last June 21, the state-run port authority said it plans to modernize and transform the port into an exclusive international port.

“The plan for ICPC is to make it exclusively an international port, admittedly as the moment the volume is not there. So, during the transition period of 5 years, it will continue to accept domestic cargo,” Mark Jon Palomar, PPA commercial services department manager said.

“However, after the fifth year, the domestic cargo will be coursed through Fort San Pedro port,” he added.

Palomar said the ICPC will be bidded out as a Tier 1 port, which is a 25 years concession period.

PPA general manager Jay Santiago said the agency would privatize the ICPC and other several ports within the year.

The ICPC is designed to handle domestic and international containerized cargo, which serves Iloilo and Western Visayas.

The PPA, however, said that the Iloilo port is currently lacking modern equipment, resulting in low productivity that prevents the port from maximizing yard and berth capacity.

“Furthermore, it prevents cargo owners from shipping directly to and from Iloilo and international origins, and from avoiding multiple and expensive handling of their containers,” the agency said.

PPA added that the Iloilo port has not served international shipping lines or handled international containerized cargo, “making it a severely underutilized investment.”

Under the proposed 25-year development plan, the required capital outlay for the project amounted to P5.87 billion, including the acquisition of modern equipment.

ICPC, which is being categorized as Tier 1 port, the PPA said it requires the prospective concessionaire to deliver a wide array of deliverables such as building landside infrastructure, installing information technology systems, and deploying sophisticated

PPA celebrates...

equipment and gears to be used for the management and operations cargohandling and other port related services.

To attract investors and to have the necessary infrastructure and equipment in place, the port authority said the winning bidder should be given incentives such as competitive tariff.

PPA said the winning bidder for the project should have “reasonable returns.”

For example, the PPA said the current rate for a 20-foot loaded container will be raised by 885 percent to P11,060.63 from the current P1,154.50.

For a 20-foot laden container, the proposed rates would be P19,713.30, higher by 870 percent from the current P2031.40.

While the proposed Tier 1 tariff for the ICPC is higher, the PPA said it would have a minimal impact on basic commodities.

For rice, PPA said the impact of higher tariff would be P0.43 per kilo and P0.75 per kilo for cement products. “The impact appears to be negligible,” PPA said.

From C1

Besides helping the Philippines recover from the throes of the pandemic, the PPA also had to adapt to meet the demands of the new normal. The authority’s efforts include constant improvement to ensure the efficient flow of goods in ports across the country.

In response to the present realities and to identify new opportunities, the PPA has amended and formulated policy measures and recalibrated its action plans to improve its port operations and services.

The PPA’s efforts continue today to maintain efficient operations that meet the demands of a modern world that is still reliant on ports for transportation.

A brief history of the PPA

Before the PPA, the Philippines’ port administration merged with the traditional function of revenue collection of the Bureau of Customs (BOC). The Bureau of Public Works (BPW) was responsible for port and harbor maintenance. In the early 1970s, there were already 591 national and municipal ports, plus 200 private ports scattered all over the country, demanding long-range planning and rationalization of port development.

There was an identified need to integrate and coordinate port planning, development, operations, and regulation at the national level. Around this time, the BOC proposed to the Reorganization Committee and Congress the creation of a separate government agency to integrate the functions of port operations, cargo handling, and port development and maintenance to enable the Bureau to concentrate on tax and customs duties collection.

Soon, the government and its concerned agencies realized that establishing and operating port authorities led to improved port operations. They felt similar benefits could come from a national port authority to administer and manage Philippine ports.

Not long, Presidential Decree No. 505, subsequently amended by P.D. No. 875 in December 1975, created the PPA.

The latter decree expanded the PPA’s scope and functions, tasking it to facilitate the implementation of an integrated program for the planning, development, financing, operation, and maintenance of ports or port districts for the country.

In 1978, the charter was further amended by Executive Order No. 513, the salient features of which were the granting of police authority to the PPA, the creation of a National Ports Advisory Council (NPAC) to strengthen cooperation between the government and the private sector, and empowering the PPA to exact reasonable administrative fines for specific violations of its rules and regulations.

The PPA was also part of what was then the Ministry of Public Works and Highways (MPWH), which also served as the executing agency for all port construction projects. Under this setup, the PPA prepared the general plans, programs, and project priorities, while the MPWH was responsible for detailed engineering, actual construction, and supervision of port construction projects.

Later, the PPA became independent of the MPWH (now the Department of Public Works and Highways or DPWH) and attached to the Department of Transportation and Communications (DOTC) for policy and program coordination. Subsequently, under Executive Order No. 159, in 1987, the PPA is now vested with undertaking all port construction projects under its port system, relieving DPWH of this responsibility. The executive order also granted the PPA financial autonomy. For nearly five decades, the PPA has held the fort for efficient and secure services throughout the various ports in the Philippines. As 2030 nears, the authority is also taking the necessary steps to move closer to becoming part of an integrated transport and logistics system, provide port facilities and services at par with global best practices, and have a port regulatory environment conducive to national development.