MANILA, Philippines – The Investment Coordination Committee-Cabinet Committee (ICC-CabCom) of the National Economic and Development Authority (NEDA) has approved the proposal of the Philippine Ports Authority (PPA) and the Department of Transportation (DOTr) to modernize the Davao Sasa Port at a greatly reduced cost to make the investment commensurate to demand.

During the meeting of the NEDA-ICC CabCom last week, the PPA and DOTr put forward the decision to pursue the project at a scaled down version with an indicative investment of P4.5 billion, effectively scrapping the P18.9 billion cost of investment approved by the NEDA Board during the Aquino administration.

NEDA Undersecretary for Investment Programming Rolando Tungpalan said the ICC-CabCom is amenable to the request made by the PPA to submit a new proposal for the modernization of the port.

“DOTr is supporting the PPA Board approved reversion to the scaled down P4.5 billion from the P18.9 billion approved (by NEDA). It was seen as more appropriate on scale as relevant to the expected demand,” he said. “Those opposing the modernization think (the previous proposal was too expensive and too large relative to demand.”

Tungpalan said PPA’s proposal to scale down the project would be conveyed to the NEDA Board when it convenes next month. PPA, in turn, was asked to submit a new proposal reflecting the scaling down of scope and investment.

“We are supportive of the request of the DOTr and PPA to submit a new proposal that brings down the design and cost substantially,” he said.

The PPA last year withdrew the port redevelopment from the list of public-private partnership (PPP) projects approved by the NEDA Board during the previous administration to consider other means of financing as it opts to pursue the project at a smaller scale.

It is currently considering to fund the hard infrastructure using internally generated funds and continue operating it as a government port. The agency is likewise open to the idea of auctioning off the operations and maintenance of the port to the private sector.

The Sasa Port Modernization project is among the administration’s priority projects in Mindanao meant to spur growth in the region’s industry and services sectors.

The value of the project rose when it was rolled out as a PPP under the previous administration as the scope of the deal was expanded.

Under the terms released by the previous administration for the P18.9-billion project, the winning private bidder would be responsible for funding the construction and other development works at the port to turn it into a modern container terminal which meets international standards.

The private partner would likewise be handling the operations and maintenance of the port.

23 May 2017
By Czeriza Valencia