Sen. Osmeña wants least costly option for P19-B Davao port PPP

The Department of Transportation and Communications (DOTC) should come up with a less costly option in modernizing the Davao Sasa Port, a public-private partnership which was pegged at P19 billion, Senator Sergio Osmeña III on Wednesday said.

In an interview after the hearing on the matter, Osmeña said the business community in Davao City were complaining about the cost of the project for fear that it would translate to higher cost of doing business. 

“Umaangal naman 'yung mga taga-Davao. Bakit naman ganun? So we conducted this hearing to get everybody’s concerns on record. Sinasuggest ko naman sa secretary of DOTC na maghanap naman tayo ng less costly option,” he said.

“Kung baga, kung bibili tayo ng kotse, bakit bibili ng Mercedes kung pwedeng Toyota lang,” he added.

The senator said the initial estimate for expanding the Sasa Port was only P4 billion based on a 2013 study by the Philippine Port Authority.  But the price tag went up to P19 billion when a new study was undertaken by Hamburg Port of Germany or Hamburg Port Consultants (HPC).

“Kung P19 billion, sinabi ng DOTC dapat ang initial na pagtaas ng rates doon per container would be 80 percent increase. Napakalaki naman, parang dodoble 'yung cost ng container,” he said.

What about Mindanao?

Once the project starts, the operator will be allowed to increase the price by 276 percent in order to break even, John Gaisano Jr., board chairman of the Davao City Chamber of Commerce and Industry Inc., said during the hearing.

“Thus, propelling the increase of cost of shipment, therefore increasing all prices of all goods entering through all ports in Mindanao," he said.

"Should over 20 million Mindanaons suffer and pay for one simple act done in a hurry today?” he added.

He noted that the minimum qualifications for bidding are so high that only one company, ICTSI, qualifies. The other Filipino company, SMC (San Miguel Corporation), also made it because it teamed up with a foreign firm that has the knowhow.

“But this high minimum qualifications for bidders will deprive other Filipino companies who are capable, like DICT (Davao International Container Terminal), a Mindanao-based company," Gaisano said.

"Please consider Mindanaons. We are Filipinos too. We appeal to Secretary Abaya to lower the qualifications, so as to  give other Filipino companies a chance, other than just ICTSI and SMC, an investor teaming with foreigner. Please give Mindanao businessmen a chance,” he said.

The businessman noted “this PPP could have been better handled if there was real local consultation during planning.”

“Many observed in the course of our research that the terms of this PPP are not so clear. I don’t like to use the word mentioned by many, 'not transparent.'  How can something that will affect more than 20 million Mindanaons be so unclear?” Gaisano noted.

He said the project was based on unrealistic business projections.

Overpriced?

For his part, Alex Valoria, president of DICT operator Anflocor, said container shipping requirements were already met by existing private ports like Davao DICT, Tefasco, Sumifru, Unifrutti, Dole / Pacinter and the planned HIPS.

He said the cost of the project appears to be overpriced, believing that there is no need to convert Sasa Port into a container port.

“In 2014, already 75 percent of foreign containers totaling 358,312 TEUs were already using the above private ports. The activity in Sasa Port today is more for local trade,” he said.

He said the German consultant assumed in its study that container volume in the Davao region will grow at an average of 6.1 percent  per year up to 2040.

“The growth assumptions are extremely unrealistic,” Valoria noted.

The project does not have the approval of the Davao City Council which is required for all government projects under the Local Government Code, he added. – VS, GMA News