The Philippine Ports Authority (PPA) plans to start the initial rehabilitation of Davao-Sasa port in the first half of 2018, eyeing an estimated budget of P2 billion for the project.
PPA general manager Atty. Jay Daniel Santiago recently told media the initial rehabilitation will include improvements in the back-up area.
Santiago said the private concession of Davao-Sasa port will still be bid out, explaining that the initial improvement and redevelopment of the port’s facilities is necessary “in order to improve the operations and improve the value of the port.”
The P2-billion budget, to be funded by PPA, is part of the overall P7 billion estimated funding allocated for the rehabilitation project. The remaining P5-billion development may be pursued by the winning concessionaire, Santiago noted.
He said earlier that PPA would start the bidding for port concessions, including for Davao-Sasa port, in 2018, as the agency would roll out its new Port Terminal Management Regulatory Framework by the first half of this year.
Under the framework, concessions will be performance- or outcome-based instead of investment-based, or based on the number of equipment or facilities to be provided by the concessionaire, a new arrangement PPA hopes would reduce transport and transaction costs, especially for agricultural products.
Rehabilitation of Davao-Sasa port has been in the pipeline for years, having faced hurdles to its implementation. In June last year, Transport Undersecretary Felipe Judan said the National Economic and Development Authority’s Investment Coordination Committee-Cabinet Committee approved the request to drop the previous P19.7-billion Davao-Sasa PPP project proposal in favor of an earlier PPA feasibility study released 2012 on modernizing the port.
PPA earlier said it preferred the 2012 feasibility study on the Davao-Sasa port modernization that pegged the development cost at only around P5 billion, which has now increased to P7 billion.
Santiago explained that the P7 billion estimated cost for the project was “more realistic” based on PPA’s engineering evaluation, and was lower because there would no longer be an expansion towards the sea, which was part of the shelved project.
The PPA chief said redeveloping Davao-Sasa, as well as modernizing other ports, is needed to make the country’s sea gateways globally competitive and to make sure cargoes are handled properly.
He added that the increasing volume of trade in the country necessitates the improvement of ports’ cargo-handling capabilities.
“We have to be prepared for any changes in trade requirements so we have to equip our ports,” he noted.
Container traffic handled by Philippine ports went up 53% in the first 11 months of 2017 to 9.084 million twenty-foot equivalent units (TEUs) from 5.940 million TEUs in the same period in 2016, following robust trade and heightened domestic demand, PPA said earlier.
READ: PH container traffic up 53% in Jan-Nov
Meanwhile, total cargo volume registered a 0.81% growth for the 11-month period to 227.312 million metric tons (mmt) from 225.495 mmt in the same period in 2016.
