Gov’t readying ATI contract extension

BY MARICEL E. ESTAVILLO, BusinessWorld Senior Reporter The Philippine Ports Authority (PPA) plans to extend Asian Terminals, Inc.’s (ATI) South Harbor cargo handling services contract for another 25 years. "We are extending their contract, they are willing to put in new investments. It will be about $150 million more," PPA general manager Oscar M. Sevilla said in an interview Wednesday during the agency’s 33rd anniversary. He said negotiations between the PPA and the listed port operator are ongoing. "It will still have to pass through the PPA board. Maybe by the end of this month, we will present the agreement to the committee. Definitely within the year, there will be a signing," Mr. Sevilla said. ATI and the PPA signed a deal in 1988 under which the firm received the right to exclusively operate Manila’s South Harbor provided it develops the facility during the concession period. After ten years, in March 1998, ATI signed a supplemental contract with the PPA extending the contract up to May 18, 2013, renewable for another 25 years. ATI made an investment commitment of $300 million. "Maraming pang gagawin so kung hindi i-extend, ’di na gagalaw ’yan. (A lot of work still needs to be done, that is why we decided to extend the contract)," Mr. Sevilla said. ATI representatives confirmed that talks were ongoing but declined to give further details. In February this year during the 4th Philippine Ports and Shipping Conference, ATI presented a three-part initiative for the expansion of South Harbor covering 2006 to 2022. The firm said it wants to develop the South Harbor as the country’s gateway for international shipping and trade. From 2006 to 2008, ATI plans to do the following: - transfer the PPA’s head office to a new building to clear the area; - undertake the rehabilitation of Pier 13 into the first dedicated mesh covered motor vehicle terminal in the country; and - construct a new combined truck holding area, including the expansion of the container terminal stacking yard. The new PPA building is expected to be completed this September. For the second phase, the plans include: - extension of crane rails and addition of one more quay crane at Pier 3; - building of crane rails and the addition of two more quay cranes at Pier 9, including the expansion of its container yard and the truck holding area; and - the transfer of the container freight station and the company’s operations buildings to more strategic locations. From 2014 to 2022, ATI plans to further develop and expand the container yard. South Harbor is ATI’s biggest operation in the country. Aside from South Harbor, ATI also operates ports in Bataan and Batangas in Luzon and General Santos in Mindanao. ATI is also one of the two companies eligible to bid for the 25-year concession for the privatization of Batangas Port and is also interested to join in the bidding for the Manila North Harbor.