The Duterte administration is expected to pursue the auction of the country’s first seaport project, Davao Sasa Port Modernization, under the public-private partnership (PPP) program despite strong opposition from the local government in Davao.
Jay Daniel Santiago, Philippine Ports Authority (PPA) general manager, said PPA will evaluate the Davao Sasa project cost, volume, and the legal issues surrounding it as a directive of the Department of Transportation.
“We have to evaluate that (Davao Sasa) on how we will implement it; either we adopt whatever is on the table, implement it based on the projected volume and projected cost, or rationalize it and try to determine if we can still implement it at more reasonable level considering the requirement is immediate,” Santiago said.
The project was approved by the National Economic and Development Authority (NEDA) and the previous administration has already prequalified five groups that are set to submit financial bids.
If PPA makes revisions on the project, it will have to seek the NEDA Board’sapproval once more.
“It’s already been approved by NEDA. We will evaluate in terms of capacity and in terms magnitude. We will pursue it at the level that we have right now or at the more manageable or cost efficient level,” he said.
“But definitely the intention is to pursue it. It will be done, it’s just a matter of how big or how small the project will be,” Santiago added.
The five companies that prequalified for the first seaport project are International Container Terminal Services Inc. (ICTSI); French conglomeratesBollore African Logistics; Asian Terminals Inc. and Dubai Port World; San Miguel Holdings Corp. and APM terminals; and the consortium of Portek International Pte and National Marine Corp.
However, the Davao City Chamber of Commerce and Industry, consumers, informal settlers, labor unions, and other affected sectors have been opposing the project.
The Sangguniang Panlungsod of Davao issued a resolution stopping the bidding because of “the irregular procedure as well as the various questions raised against the Sasa Port Modernization project now being bid out without prior consultation and expressed approval of the local government as provided for by the Local Government Code.”
The Davao Integrated Port and Stevedoring Services Corp. (DIPSSCOR), an operator at the Sasa port, said the current capacity of Sasa stands at 700,000 twenty-foot equivalent units (TEUs). The yearly volume handled by DIPSSCOR, a subsidiary of ICTSI, is only 300,000 TEUs.
Previously, the Department of Transportation and Communications hired Hamburg Port Consultants (HPC) to conduct a study that would serve as the basis for the Sasa PPP.
HPC assumed in that study that container volume in Davao region will grow at an average of 6.1 percent per year up to 2040 that contains an incredibly high growth rate of more than 20 percent a year (27 percent in 2020) that was frontloaded in the initial years and compensated it with low growth rate projections towards the tail end of the projection period.
From 2013 to 2014, Sasa port container volume declined by 134,504 TEUs (33 percent) and was expected to decline further in 2015.
Sasa port is located close to downtown Davao City along the Pakiputan Strait. It is operated by PPA, and Marine Services and Pilotage are provided by PPA-licensed private entities.
Presently, there are two new privately-owned container terminal initiatives in the Davao Bay region, Davao International Container Terminal and Hijo International Port of ICTSI.
Source: Malaya Business Insight
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