Port Development
Through
Public-Private Sector Partnership
A Country Paper
presented by the Philippines
through the Philippine Ports Authority
during the 36th APA Meeting
Siem Reap, Cambodia
8-10 December 2010
Port Development Through
Public-Private Sector Partnership
I. INTRODUCTION
II. DEVELOPMENT NEEDS OF PORTS
III. PPA PRIVATIZATION FRAMEWORK
IV. PPA PRIVATIZATION VENTURES
V. INTROSPECTION
Port Development Through Public-Private Sector Partnership
INTRODUCTION
Introduction
Manila Forum on
Public-Private Sector Partnership
• Signaled the Philippine Government’s call
for Public-Private Sector Partnership (PPP)
• Attended by key officials/representatives
of business and financial institutions
• Considered PPP as tool for delivering
urgent projects in critical development areas
• Reinforced the government’s confidence
on economic growth and self-reliance
Introduction
PPP and Port Development
Benefits:
• Provide funds for port development
• Reduce government’s financial exposure
• Maximize port facility utilization
• Upgrade existing port facilities
• Broaden government’s capital base
and dispersal of economic benefits
Port Development Through Public-Private Sector Partnership
DEVELOPMENT NEEDS OF PORTS
Development Needs of Ports
Master Plan on ASEAN Connectivity
• Support ASEAN Community
establishment by 2015
• Impel ASEAN ports to explore and tap
resources for port development
• Identify key infrastructure deliverables
by 2015
Development Needs of Ports
PPA Vision Ports
. . . . control more than 60% of trade
BATANGAS
OZAMIS
MANILA
South Harbor
North Harbor
MICT
ILOILO
CAGAYAN DE ORO
ZAMBOANGA
DAVAO
GENERAL SANTOS
Development Needs of Ports
Major Gateways of Trade
Port of
Iloilo
Statistics
2005
2006
2007
2008
2009
10,787
9,611
10,054
9,156
9,919
2,441,984
2,365,858
2,226,494
2,242,351
2,332,392
Container
87,192
84,485
75,782
81,935
82,559
Passenger
2,321,746
1,989,936
2,050,315
1,901,333
1,788,941
Shipcall
Cargo
Development Needs of Ports
Major Gateways of Trade
Port of
Cagayan de Oro
Statistics
2005
2006
2007
2008
2009
2,532
2,415
2,341
2,299
2,398
3,450,043
3,434,882
3,515,493
3,543,143
3,398,791
Container
202,236
178,458
161,989
150,207
140,860
Passenger
1,381,566
1,233,605
1,188,008
1,034,937
1,016,453
Shipcall
Cargo
Development Needs of Ports
Major Gateways of Trade
Port of
Davao
Statistics
2005
2006
2007
2008
2009
963
930
911
861
969
3,124,963
3,102,365
3,372,023
3,597,396
3,863,137
Container
225,719
260,743
298,671
349,005
392,027
Passenger
152,927
120,826
105,939
89,168
71,673
Shipcall
Cargo
Development Needs of Ports
Major Gateways of Trade
Port of
General Santos
Statistics
2005
2006
2007
2008
2009
960
1,004
936
978
1,027
1,603,589
2,108,499
1,678,041
1,936,854
1,903,120
Container
110,108
97,322
103,579
113,886
126,559
Passenger
194,232
178,532
161,596
112,787
104,967
Shipcall
Cargo
Development Needs of Ports
Major Gateways of Trade
Port of
Zamboanga
Statistics
2005
2006
2007
2008
2009
9,901
8,622
7,798
6,766
5,995
1,576,421
1,475,554
1,592,664
1,575,206
1,546,523
Container
64,093
60,021
63,675
64,960
79,047
Passenger
2,914,425
2,135,667
2,163,836
2,180,688
2,326,213
Shipcall
Cargo
Development Needs of Ports
Privatized Major Gateways
•
MICT
•
Manila South Harbor
•
Manila North Harbor
•
Port of Batangas
Development Needs of Ports
Major Gateways
Regional Hubs
• Strategic Locations
• Role in ASEAN Port Network
• Link to BIMP-EAGA
Development Needs of Ports
Proposed Development Projects for Major Ports
Estimated
Project Cost
(In Million
PhP)
Implementation
Schedule
Iloilo Commercial Port Complex
(Expansion and Improvement
Proposed Reclamation with 1,773.43
Project)
Sheet Piles (200m x 204m)
2011-2015
Project
Proposed Works
Proposed Extension of RC
Wharf (260m x 26.26m)
Proposed Construction of
Cagayan de Oro Port Expansion Back-up Area for Open
1,797.09
Transit Shed
(5,000
and Improvement Project
sq.m.)
Proposed Construction of
Passenger Terminal Building,
Davao Port Expansion and
Allied Facilities, Parking Area 4,950.34
Improvement Project
and RORO Ramp at the
South End of the Port
2011-2015
2011-2015
Development Needs of Ports
Proposed Development Projects for Major Ports
Project
Proposed Works
Estimated
Project Cost
(In Million
PhP)
Implementation
Schedule
General Santos Port
Expansion and
Improvement Project
Proposed Installation of
1,850.76 2011-2015
Quay Crane Rail (1 unit)
Zamboanga Port
Expansion and
Improvement Project
Proposed Extension of
1,974.26 2011-2015
RC Wharf (170m x 24m)
Development Needs of Ports
Proposed Development Projects for Minor Ports
Estimated Project Cost
(In Million PhP)
Implementation Schedule
339.21
2011-2015
200.00
210.01
2011-2015
2011-2015
40.00
2011-2015
San Andres Port Expansion
Project
40.00
2011-2015
Dapitan Port Improvement
Project, Paving
52.74
2011-2015
Project
Dumaguete Port Expansion and
Improvement Project
Tacloban Port Improvement Project
Matnog Port Improvement Project
San Andres Port Expansion
Project
Development Needs of Ports
Proposed Development Projects for Minor Ports
Project
Surigao Port Improvement
Project, Paving
Nasipit Port Improvement
Project, Paving
Masao Port Improvement
Project
Esperanza Port Ro-Ro Ramp
and PTB
Bais Port, Negros Oriental
Port Development
Dumangas Port, Iloilo Improvement
Project, Paving, Ro-Ro & PTB
Estimated Project Cost
(In Million PhP)
Implementation Schedule
29.49
2011-2015
19.51
2011-2015
50.00
2011-2015
40.00
2011-2015
50.00
2011-2015
80.00
2011-2015
Development Needs of Ports
Proposed Development Projects for Minor Ports
Project
Lipata, Culasi, Antique
Port Expansion Phase 2
Numancia Port, Akla
Port Development
Numancia Port, Akla
Port Development
Balabac Port
Expansion Project
Coron Port Development Project
Currimao Port Rehabilitation
and Extension Project
100m Ro-Ro Ramp
Estimated Project Cost
(In Million)
Implementation Schedule
40.00
2011-2015
60.00
2011-2015
60.00
2011-2015
40.00
2011-2015
180.00
2011-2015
50.00
2011-2015
Development Needs of Ports
Proposed Development Projects for Minor Ports
Project
Estimated Project Cost
(In Million)
Implementation Schedule
Kalamansig Port Improvement,
Reclamation & Concrete Paving of
3,600sq.m. shore area installation of 9
pcs., V-type RDF,
Construction of TMP Bldg.
32.40
2011-2015
Taytay Port Expansion Project
100.00
2011-2015
Calapan Port Admin. Bldg. & Site
Development Project
80.00
2011-2015
Plaridel Port, Port Expansion Project
100.00
2011-2015
Development Needs of Ports
PPA Medium Term
Port Development Project
(2011 – 2015)
. . . . requires Gross Funding of PhP14 Billion
Port Development Through Public-Private Sector Partnership
PPA PRIVATIZATION FRAMEWORK
PPA Privatization Framework
Comprehensive National Economic Reforms
• Deregulation
• Liberalization of Foreign Exchange
• Passage of New Foreign Investment Law
• Passage of New Foreign Banking Act
• Passage of Build-Operate-Transfer (BOT) Law
PPA Privatization Framework
The role of ports in
the Philippines has
been regarded with
utmost importance
due to the country’s
archipelagic
topography.
PPA Privatization Framework
PPA Privatization Schemes
• Whole Terminal Leasing
• Facilities and Real Estate Property Leasing
• Port Services Contracting
Port Development Through Public-Private Sector Partnership
PPA PRIVATIZATION VENTURES
PPA Privatization Ventures
In port development,
PPP bridges the gap between
what PPA can undertake and
what the private sector can offer .
PPA Privatization Ventures
The MICT Experience
- A classic success story of the
Philippine Ports Authority’s
PPP initiative
PPA Privatization Ventures
The MICT Experience
Highlights:
1. PPA Takeover of MICT in 1978

Assumed jurisdiction from Bureau of Customs

Incurred only two (2) foreign vessels

Handled only a total of 2,858 metric tons of cargo

Provided with minimal port facilities

Equipped with only two (2) container cranes
as main cargo handling implements
PPA Privatization Ventures
The MICT Experience
Highlights:
2. PPA-MICT Port Development by Administration

Spurred by severe cargo congestion problems
in Manila South Harbor

Implemented at a cost of PhP300 Million

Provided major improvements in port facility

Augmented cargo handling equipment inventory
PPA Privatization Ventures
The MICT Experience
Highlights:
3. PPA-MICT Port Development by Contract

Secured to finance further MICT development
requirements

Implemented at a cost of US$27 Million
and DM12.5 Million

Enhanced port capacity to 450,000 TEUs
PPA Privatization Ventures
The MICT Experience
Highlights:
4. PPA Privatization Initiative
 Pursued as a port development strategy
 Applied first privatization venture at MICT in 1988
 Awarded MICT privatization contract to International
Container Terminal Services, Inc. (ICTSI)
 Granted 15-year concession period, renewable for
another 25 years
 Stipulated PhP247 Million contractual commitment
for MICT port development
PPA Privatization Ventures
The MICT Experience
Highlights:
4. PPA Privatization Initiative
 Extended ICTSI Contract for another 25 years,
to expire in May 2038
 Obligated ICTSI to invest US$126 Million
in additional civil works and equipment
 Provided the Philippine Government with
substantial savings in port development
PPA Privatization Ventures
The MICT Experience
Highlights:
5. MICT under ICTSI Management and Operation
 Intensified port activities resulting to significant
growth in cargo throughput and shipping traffic
 Introduced improvements in the quality
of service delivery
 Re-invented MICT into becoming the largest and
most modern international port in the country
PPA Privatization Ventures
The MICT Experience
Highlights:
5. MICT under ICTSI Management and Operation
 Showcased ICTSI capabilities as port operator
with international caliber
 Spurred ICTSI to launch dynamic overseas and
domestic expansion program in 1994
 Earned for ICTSI the respect and regard as a
reputable key player in the port industry
PPA Privatization Ventures
Other PPA Privatization Endeavors
• Manila South Harbor
• Manila North Harbor
• Batangas Port Container Terminal
A-1, Phase II
PPA Privatization Ventures
Other PPA Privatization Endeavors
• Manila South Harbor
 Management Contract awarded to Marina
Port Services, Inc. (MPSI) in March 1987
 MPSI granted exclusive management and
operation of arrastre services
 Management Contract covered an 8-year
concession period to expire in March 1995
PPA Privatization Ventures
Other PPA Privatization Endeavors
• Manila South Harbor
 MPSI changed company name to Asian
Terminals, Inc. (ATI) in 1993
 ATI entered into Compromise Agreement in
1995 to fully integrate cargo handling services
 Compromise Agreement extended
Management Contract until 2007
PPA Privatization Ventures
Other PPA Privatization Endeavors
• Manila South Harbor
 ATI entered into Supplemental Contract in 1998
extending concession period until 2013
 ATI to invest not less than US$300 Million in
ten years on infrastructure and equipment
 ATI invested US$134 Million from 1998 to 2008
in infrastructures and equipment
 Port capacity enhanced to annual total of 2,400
shipcalls, 15.5 MMT cargo and 860,000 TEUs
PPA Privatization Ventures
Other PPA Privatization Endeavors
• Manila North Harbor
 Manila North Harbor Modernization Project (MNHMP)
implemented to increase existing port capacity
 Manila North Harbour Port, Inc. (MNHPI) accepted
in April 2011 the Management Contract responsibilities
 MNHPI to undertake port development, management,
operation, and maintenance over a 25-year period
 MNHPI to infuse a total of PhP2.27 Billion for port
modernization projects
PPA Privatization Ventures
Map of
North Harbor
Map of
North Harbor
Other PPA Privatization Endeavors
Marine
Slipway
• Manila North Harbor
Terminal 1:
LO-LO Containers
 MNHPI to provide the following major components
of the modernized port:
Pier 16
Pier 14
 Terminal 1 - for containerized vessel operations
Pier 12
North
Harbor
Pier 10
2:
LO-LO
Containers
 Terminal 2 - for containerizedTerminal
vessel
operations
Isla
Puting
Bato
Pier 8
 Terminal 3 - for non-containerized and
bulk/breakbulk vessel operaitons
Pier 6
Pier 4
3:
 Passenger Terminal Complex - Terminal
two-story
building
General
Cargo
for passengers coming from Terminals 1 and 2
Pier 2
Existing Layout
Future Development Plan
PPA Privatization Ventures
Other PPA Privatization Endeavors
• Batangas Port Container Terminal A-1, Phase II
 Management Contract awarded to ATI
on March 25, 2010
 ATI to undertake management, operation,
development, maintenance, and promotion
 ATI to deliver arrastre, stevedoring, storage,
and related container handling services
 ATI to provide necessary facilities, cargo handling
equipment, gears, and safety implements
Port Development Through Public-Private Sector Partnership
INTROSPECTION
Whichever path needs to be taken in
implementing Public-Private Sector
Partnership, upholding the stake
of the common good should supremely
prevail over any other privatization
outcome and benefits.
Port Development
Through
Public-Private Sector Partnership
A Country Paper
presented by the Philippines
through the Philippine Ports Authority
during the 36th APA Meeting
Siem Reap, Cambodia
8-10 December 2010