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 equipment and gears to be used for the management and operations cargo-handling 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.
