P8.7-B seaports development proposal up for evaluation

By: Emme Rose Santiagudo

The Philippine Ports Authority (PPA) has formally received the unsolicited P8.7-billion proposal of International Container Terminal Services, Inc. (ICTSI) to develop and improve two sea ports in Iloilo.

In a statement on Monday, ICTSI confirmed receiving an acceptance letter from PPA after completing the 2013 National Economic Development Authority (NEDA) guidelines and procedures on joint venture agreements between government and private entities.

“We are excited about this development as we know we submitted a fully compliant proposal that will be most beneficial for Iloilo. We are fully committed to working with the PPA on this project, and are hopeful to be granted original proponent status (OPS),” ICTSI Global Corporate Head Christian Gonzalez said in the statement.

The legal, financial and technical merits of ICTSI’s proposal will be evaluated by PPA for a maximum of 60 days.

ICTSI intends to invest P8.7 billion to upgrade and develop the Iloilo Commercial Port Complex in Loboc, Lapuz, Iloilo City.

The development will include dredging and deepening of the drafts and channel for the entry of international vessels and purchase of modern quayside crane handling equipment.

ICTSI also plans to develop the Dumangas Port to cater to the spill over from the Loboc Port.

“With the transportation department’s recent directive to fast track unsolicited bids for port projects, we are confident that we will be able to assist the Philippine government more in its goals of upgrading the country’s port network; and help Iloilo attain its full potential in facilitating even greater trade facilitation that will improve connectivity for cargo movement within the country,” Gonzales added.

Once it receives the OPS, ICTSI’s proposal will be turned over to the NEDA for evaluation and approval

The proposal will then go through Swiss challenge.

Swiss challenge is procurement system accepted in several jurisdictions, including the Philippines.

Swiss Challenge is described in Republic Act No. 6957 (Build Operate Transfer Law) as the system to be followed when projects are procured through unsolicited proposals from private sector.

Section 4-A of the BOT law allows acceptance of unsolicited proposals for projects which do not require direct government guarantee, subsidy, or equity and more importantly, which involves a new concept or technology. Section 10.3 of the implementing rules allows it as long as the proposal involves a new concept or technology.

A project is considered to involve new concept or technology under Rule 10, Section 10.2 of the BOT law IRR if it possesses at least one (1) of the following attributes:

-a process which significantly reduces construction costs, accelerates project execution, improves safety, enhances project performance, extends economic life, reduces costs of facility maintenance and operations or reduces negative environmental impact or social/economic disturbances or disruptions either during the construction or operation phase; or

-a process for which the proponent possesses exclusive rights, either world-wide or regionally or intellectual property rights (https://www.bworldonline.com/build-build-build-and-the-swiss-challenge-method/)

Meanwhile, Francis Gentoral, executive director of Iloilo Economic Development Foundation (ILED) expressed support to the ICTSI proposal.

According to Gentoral, Iloilo needs a good logistics facility to fully develop its potential in agri-manufacturing.

“Dako ini siya na project if ang amo ni nga investment masulod sa Iloilo. Ang ILED naga-support gid sa pagmodernize sang ports para mascale up naton ang aton agricultural industry and potential sa agri-manufacturing. We need good logistics facility like the ports,” he said in an interview on Monday.

Gentoral said they backed the ICTSI proposal by writing a letter to PPA to fast track the process of review and approval.

ILED is an umbrella organization of business organizations and leaders and local government units.