The Philippine Ports Authority (PPA) has approved a 10% increase in cranage rates at North Port, Manila’s domestic terminal in one tranche on October 15.
PPA Memorandum Circular (MC) No. 19-2018, dated September 11, pegged rates for a loaded twenty-foot equivalent unit (TEU) and below at P1,417 (loaded) and P1,191.50 (empty); and for containers above 20-footer, P1,982 (loaded) and P1,535.50 (empty).
The approved cranage rate, pursuant to PPA Board Resolution No. 2733, is lower than the 28.46% requested by North Port operator Manila North Harbour Port, Inc. (MNHPI) last January.
MNHPI chief financial officer Ariel Victoria, in a presentation during a public consultation on their proposal last June, said North Port’s current rates were issued and approved in 2013, in keeping with rates set under the concession agreement between PPA and MNHPI in 2009.
The depreciation of the Philippine peso and rising inflation in the past years were the reasons for the proposed increases, Victoria said.
He explained that quay cranes, as well as spare parts for maintenance and sheet piles supporting civil infrastructure for the cranes, were affected by the peso depreciation, being imported from abroad and bought in US dollars.
The exchange rate has depreciated by 14.26% from December 31, 2013 to December 31, 2017, and by 20.24% from December 31, 2013 to date, Victoria said.
Inflation also contributed to increased costs of cranage operations, particularly to the higher cost of spare parts, power, and hiring of skilled workers. From December 31, 2013 to December 31, 2017, inflation has gone up to 14.2%, and to 18.3% from December 31, 2013 to date.
MNHPI in its petition dated January 11, 2018 said it currently has eight quay cranes, two more than the required six units for this year under the concession agreement with PPA.
As of December 31, 2017, the total cost of acquisitions of cargo-handling equipment is P5.3 billion, with P3.7 billion related to the cost of acquiring the equipment complement for cranage operations. As of early January 2018, MNHPI said, port development cost amounts to P5.8 billion, with P2.8 billion related to civil infrastructure necessary for crane operations.
Total investment for crane operations is P6.5 billion, MNHPI said. – Roumina Pablo
