The PPA is inviting bids for the contract from a single operator that would, in turn, market its facilities to concessionaires.
The PPA has been charged with responsibility for overseeing the privatisation of Manila North Harbour, the country's premier domestic port. The modernisation of the Philippines' largest and busiest seaport is one of the priority projects of President Gloria Macapagal-Arroyo. Last year North Harbour led all other Philippine ports with 13.8m tonnes, or 18.9%, of the total domestic cargo handled and ranked third in the country in terms of containers handled with 607,017 twenty foot equivalent units, according to the ports authority.
The 25-year renewable contract would grant exclusive rights to operate Manila Harbour's Terminal 1, which services roll-on, roll-off container and passenger vessels; Terminal 2, for service container and passenger vessels; and Terminal 3, which includes conventional, non-containerised, bulk or break-bulk vessels and passenger vessels.
According to the PPA, proceedings had to be cancelled because only one bid, a joint venture between Harbour Centre Port Terminals Incorporated (HCPTI) and Metro Pacific Investment Corporation (MPIC) was deemed eligible. PPA General Manager Oscar Sevilla, explained to local media that the winning bid would not be based on the company that can produce the best revenue plan.
Sevilla said, "The PPA is seeking the company that can offer the lowest tariff rates. For this new method, the PPA needs to compare at least two bids."
Originally, six groups were considered eligible to bid, but the field was eventually narrowed down to two, Asia Terminal Incorporated (ATI) and the joint venture bid between HCPTI and MPIC, after the others had either dropped out or failed to meet the specific requirements of the process.
ATI currently runs the South Harbour and is partly owned by Dubai Ports World, the third-largest port operator in the world. MPIC is the local unit of Hong Kong-based First Pacific, and one of the largest holding companies in the Philippines. It would own 35% of the joint venture company, while Harbour Centre, which currently operates the Harbour Centre Port Terminal in Manila, and is owned by Philippine construction magnate Regis Romero, would own the remaining 65%.
ATI was disqualified because it did not produce the required waiver stating it would not sue the PPA while the proceedings were ongoing. ATI only provided a power of attorney allowing its chief executive to execute such a waiver.
The PPA reassured sceptics that the North Harbour situation would be resolved in the near future. It said it will invite and pre-qualify prospective bidders for the Manila North Harbour within the month so bidding can begin by October of this year.
"[The bidding] will definitely not stretch until next year," Sevilla was quoted as saying.
He added, "We will call a new round immediately because it is an important and urgent project."
The PPA stated that all companies previously considered ineligible can resubmit their bids and that it had formally changed the terms of the privatisation process so that it clearly states bidding can only take place with two or more bidders.