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MPIC-Harbour Centre wins North Harbor bid

By Mary Ann LL. Reyes (The Philippine Star) Updated August 24, 2009 12:00 AM

MANILA, Philippines - The P14.5-billion proposal submitted by the consortium of Metro Pacific Investments Corp. (MPIC) and Harbour Centre Port Terminals (HCPTI) won in the bidding conducted by the Philippine Ports Authority (PPA) for the modernization and development of the Manila North Harbor, the country’s oldest but busiest port terminal.

The consortium won during last Thursday’s bid opening conducted by the PPA. The joint venture passed all the criteria of the two-year rigorous pre-qualification and bid process mandated by the PPA’s terms of reference.

Last Aug. 14, the consortium formally submitted its P14.5-billion bid for the modernization of the dilapidated port which is in danger of collapsing. Opening was delayed due to lack of quorum of the PPA special bids and awards committee and was reset to last Aug. 20 with all members of the committee present.

Patricia Sandejas, Harbour Centre assistant vice president for business development, said the SBAC will conduct a post-evaluation process of the bid within a 15-day period following the submission, after which it will formally announce the award of the project to the joint venture.

The joint venture will be a 65-35 undertaking between Harbour Centre and MPIC, respectively. Sandejas said they plan to incorporate a joint venture company after the award.

Harbour Centre CEO Michael Romero said the modernization of North Harbor would revitalize and enhance economic activities in Manila and would spur growth across the country.

“The government will not spend a single centavo for the project, yet this will result in the emergence of a new and improved image of Manila and the Philippines. This is first and foremost a victory for the Filipino people,” he added.

The project will raise more than P6.8 billion in revenues for the PPA over 25 years and decrease port rates at an average of 10 to 15 percent. More than 1000 workers of the different operators of North Harbor will be absorbed, while an additional 5000 jobs will be generated directly and indirectly by the ambitious construction and modern operations entailed in the modernization. The Tondo area is also set to be revitalized with the modernized port.

Meanwhile, Sandejas told The STAR that the bulk of the P14.5-billion project cost for the modernization and redevelopment of the port will be spent during the first six years. The concession is for a period of 25 years.

Once the contract is finally awarded, Harbour Centre will become the country’s largest terminal operator by volume.

The North Harbor currently accounts for more than half of the total domestic port business.

As planned, the North Harbor’s terminal 1 will service roll on-roll off container and passenger vessels.

Terminal 2 will service container and passenger vessel, and will also cover the reclaimed Piers 6 and 10 while Terminal 3 will be allotted to conventional, non-containerized, bulk or break-bulk vessels and passenger vessels.

The port business is one of the sectors identified by MPIC as new engines for growth alongside with tollways, water, healthcare and eventually mining.

Earlier, MPIC chairman Manuel Pangilinan said sees a bright future for the Manila North Harbor once redeveloped. “It can be a hub for mineral shipments, for one,” he said.

Consortium officials noted that the development and modernization of the Manila North Harbor is imperative because at present, it is a badly dilapidated port with its underwater structures deteriorating at an alarming rate. The project will facilitate inter-island shipping and boost the economy as a whole, they said.

Phase I of the project will be implemented over a period of six years. The winning bidder will complete during the first year of the contract the crane rail for two LO-LO berths at Terminal 1 and pavement/concreting of container yards. After the completion of the crane rail for the two LO-LO berths, the operator shall procure two shore cranes and support equipment.

The other components of Phase 1, such as reclamation, construction of the PTB, construction of additional LO-LO berths and RO-RO berths, including the development of an Information Technology (IT) system, shall be completed within three years from the start of the contract.

Phase II of the project will cover the development of Terminals 2 and 3 and the second Passenger Terminal Building at Slip 5, which shall be constructed within a period of three years, commencing upon completion of Phase I.

Contrary to reports, officials explained that the winning bidder will not be given a three-year grace period within which just to collect port dues, tariff and charges. In fact, the winning bidder will already be implemented and completed during the first three years of the contract a substantial amount.

They said it is clear that there is a clear timetable for the winning bidder to construct the shipping berths and passenger terminals. All these will be completed within the first three years from the start of the contract.

They added that the project is economically feasible and will not be disadvantageous to the government as alleged by certain quarters.

Company officials pointed out that first, the modernization of North Harbor to a world-class port will be done without the government spending a single centavo. The government, through the PPA, will be guaranteed a fixed fee of P6.8 billion for 25 years regardless of economic conditions. PPA will also retain collection of fees for usage, wharfage and anchorage, among others.

Second, the winning bidder will reimburse the PPA the amount of P15 million as consultant’s success fee within 10 days from signing of the contract. The bidder will reimburse PPA for past service benefits advanced by PPA in the total amount of P113 million.

Third, the main criteria for award of the contract is lowest tariff, i.e., reduced fees for the port user, and fourth, upon expiration of the contract, all improvements, structures, buildings and facilities shall belong to the PPA.

They also explained that the project will maintain the government’s sovereign power to levy tariff. In the 25-year contract for the modernization of North Harbor, the government will still maintain its authority to levy port charges tariff, such as usage fees and wharfage, as well as to approve the rates on cargo-handling charges tariff similar to the South Harbor and MLCT contracts.

It is the PPA, and not the winning bidder, who shall be responsible for the removal of the informal settlers within the area of operations, they added.

North Harbor services Metro Manila and the nearby provinces of Bulacan, Pampanga, Tarlac, Nueva Ecija, Nueva Vizcaya, Rizal, Cavite, Laguna, Batangas and Quezon.

It can accommodate all types of interisland vessels and has six main piers that cater to coast-wise cargo and passenger ships. — With Rainier Allan Ronda


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