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Gov’t scraps Davao port from PPP list

Modernization project cost scaled down to P4.9B
/ 02:13 AM December 19, 2016

The Philippine Ports Authority (PPA) will pursue a smaller plan to modernize and expand Davao’s Sasa Port as it decides whether to still include it in the public-private partnership (PPP) project pipeline.

PPA general manager Jay Santiago said last week the board was currently studying and “revalidating” a plan to redevelop the Sasa Port using a budget of up to P4.9 billion.

That compares to a previous P19-billion development cost for a much bigger Davao Sasa project that was approved by the National Economic and Development Authority (Neda) under President Aquino. That project was being pursed using a PPP scheme and has lured five qualified groups, including local and foreign port operators.

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Given the new direction, Santiago said the PPA would definitely scrap the P19-billion Davao Sasa project, which was still listed as among the PPP deals under procurement as of Dec. 15.

Santiago added that PPA was considering funding the revised project on its own, given the reduced budget, although he noted a PPP scheme “is still an option.” He noted that the government might also decide to altogether scrap private sector participation.

“There are arguments saying there should still be a government presence in that area to make sure that port fees and cargo fees will be maintained,” he said.

Santiago noted that a final decision would be made soon.

“It should not exceed the first quarter of next year. Definitely, there will be movements in Davao Sasa in terms of construction,” he said.

The prospect of a revised Davao Sasa project emerged last October after Felipe Judan, the DOTr’s undersecretary for maritime, said the P19-billion budget was “not justified.”

The previous administration had explained that the bigger sum considered a more aggressive expansion approach and was aimed at transforming Davao Sasa into the Davao region’s premier seaport. This would allow it to cater to increased demand for crucial agricultural exports like bananas. The project had a 30-year concession period.

Davao businessmen, including those who operate nearby private ports, heavily criticized the Davao Sasa PPP, which would increase competition in the area.

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Davao Sasa had a considerable advantage over at least two other private ports given its location in Davao City, an information memorandum distributed to interested bidders in April 2015 showed.

Competing private ports included Davao International Container Terminal, controlled by the Floirendo Group.

The five groups earlier qualified to bid for the Davao Sasa PPP project were San Miguel Holdings Corp.-APM Terminals Management (Singapore) Pte. Ltd. consortium, Razon’s International Container Terminal Services Inc., Asian Terminals Inc.-DP World FZE consortium, Portek International Pte. Ltd.-National Marine Corp. consortium and Bollore Africa Logistics.

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TAGS: Davao, Davao city, modernization, Philippine Ports Authorirty, PPP, public-private partnership
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