SMC eyes Davao’s Sasa port

MANILA, Philippines–Conglomerate San Miguel Corp. (SMC) has acquired bid documents for the P17-billion Davao Sasa Port modernization project, making it the first company to formally express its interest over a deal that other groups said might not be feasible.

Public Private Partnership Center executive director Cosette Canilao confirmed SMC’s purchase of bid documents, which were made available to interested parties starting April 14 this year.

Other investors that have initially expressed interest, like Malaysia’s MTD Group, said they would no longer be bidding for the Davao Sasa PPP project.

“We are just choosing the right projects that we want to participate in,” MTD Philippines president Isaac David said in an interview.

A project like Davao was also aimed at luring port operators, but the country’s leading player, International Container Terminal Services Inc. is unlikely to join as well, its chair and president Enrique Razon Jr. said in a previous interview.

Razon cited intense competition in the area, on top of the Sasa project’s high capital spending requirement. ICTSI operates ports mainly in global emerging markets and the Philippines, including four in Mindanao alone.

“What we are seeing is the investment requirement is so large when there are numerous private ports already in the area. So we may not bid for that,” Razon said.

The Department of Transportation and Communications (DOTC) said the winner of Davao Sasa will develop, operate and maintain the port project for a period of 30 years.

The DOTC’s bid invitation showed that the modernization project covered the improvement of the existing port and the establishment of “dedicated” container handling facilities with initial design capacity of 1,900 container ground slots up to a minimum of 2,700 container ground slots.

“The project will involve the development of the existing Davao Sasa Port in Davao City into a modern, international-standard container terminal that will improve trade access to Mindanao and the Philippines by providing a dedicated containerized port in the region,” the government said in a previous notice.

The department said the auction is open to interested Filipino and foreign participants. The World Bank of the Philippines and International Finance Corp. were earlier tapped by the DOTC and Philippine Ports Authority as the transaction advisors for the PPP deal.