Special Bids and Awards Committee (Sbac)

Special Bids and Awards Committee (Sbac)

NATIONALPORT ADVISORY COUNCIL

COMMITTEE ON PORT OPERATIONS AND TARIFF (NPAC-CPO&T)

MINUTES OF MEETING NO. 03-2007

18 September 2007

PPA Board Room, PPA Head Office

MarsmanBuilding, SouthHarbor, Port Area, Manila

1. ATTENDANCE

Present

Mr. Benjamin B. Cecilio-NPAC-CPO & T Chairperson and

AGM for Operations, PPA

Atty. Maximino T. Cruz -Principal Representative, AISL

Atty. Jean Ver P. Pia-OIC, FSRD, Franchising Office, MARINA

Ms. Julita Lopez-Vice Chair, PUC

Mr. Alberto H. Suansing-Representative, PCASO

Mr. Quirimon A. Tan, Jr.-Director, PISA

Mr. Alexander C. Ong-Director, PUC

Mr. Marceliano P. Bernal, Jr. -Asst. Director, PSB

Other Attendees

Ms. Emma L. Susara -Head, NPAC-CPO&T Secretariat, PPA

Ms. Lilian T. Javier-Alternate Head, NPAC-CPO&T Secretariat, PPA

Ms. Leila L. Martinez-Member, NPAC-CPO&T Secretariat, PPA

Ms. Nelia Cable-Member, NPAC-CPO&T Secretariat, PPA

Ms. Elizabeth R. Arrieta -Member, NPAC-CPO&T Secretariat, PPA

Ms. Imelda I. Hilario-Member, NPAC-CPO&T Secretariat, PPA

Mr. Jose Louie B. Banua-Member, NPAC-CPO&T Secretariat, PPA

2. CALL TO ORDER

Upon confirmation of a quorum by the Secretariat Head, AGM Cecilio called the meeting to order at 2:15 p.m.

3. AGENDA

The body approved the agenda for the meeting.

4. APPROVAL OF THE MINUTES OF THE 13 JULY 2007 MEETING

As moved by Atty. Cruz, the Committee approved the Minutes of the 13 July 2007 Meeting.

5. MATTERS ARISING FROM THE MINUTES OF THE 13 JULY 2007 MEETING

  1. Concerns raised on the presentation by the Consultants of the Cost-based Tariff Analysis and Development Project:
  1. CH tariff should be on a per CH operator basis

The Committee members suggested and proposedthat the CH tariff should be on a per CH operator basis instead of the existing policy of CH tariff on a per port basis. Ms. Susara informed that as opined by Mr. Supangco, the Project Director of the tariff consultancy project in the previous meeting, the matteris a policy issue of the PPA.Ms. Susara also relayed to the body that the matter as well as other comments and suggestions will be discussed in detail in the September 21, 2007’s meeting with the Consultants.

2. “Linear per hour” as basis for port charges

AGM Cecilio apprised the body that Mr. Te, one of the representatives of the shipping lines raised the suggestion to have the “per linear per hour” as basis in charging dockage fees instead of the existing “per GRT per day”. The shipping lines suggested that the berthing fee be based on per linear meter where the berth occupied is measured by the number of hours. AGM Cecilio commentedthat the matter must be studied first.There are vessels that are berthed “Mediterranean style.”As such, the length over-all (LOA) cannot be used as basis in charging since only the width of the vessel occupied the berth and the length of the vessel is not measured. In this case, PPA’s revenue will be affected as the occupied berthing space would be less. The consultants for the project were requested to recommend options for basis for charging. However, the outcome must not yield decrease revenue for PPA.

3. Determine the reasonable number of manpower complement in CH operations (Consultant to discuss this with PCASO)

Offhand, AGM Cecilio related that the cargo handling contractors are not satisfied with the initial resultsof the study on the computedstandard/reasonable labor complement in CH operations.

4. Examine the treatment of empty containers

Ms. Susara informed that the issue is on whether there should be different rates for empty containers vis-à-vis loaded containers. Mr. Suansing suggested that the rates should be different. Mr. Tan stated that empty containers are lighter than loaded containers. Further, he said that containers are part of ship’s gears and these are carried for free. He then insisted that empty containers should not be charged handling fee.

B. Issue a directive for the CH operators to stop the practice of using the shipping lines’ equipment

PPA Operations Memorandum Circular No. 02-2007 dated July 23, 2007 directed CH operators to stop the practice of using the equipment of the shipping lines. Mr. Tan averred that apparently there is a problem with the said Circular. He reported that it caused some problems in Davao as the people there thought that the Circular is effective immediately. However, the shipping lines’ intention is for PPA to review the 65%-35% sharing scheme between the shipping lines and CH operators.

Mr. Suansing admitted that in the craftingof the sharing agreement between the shipping lines and the CHOsback in 1988, some significant variables were not considered in the formulation of the sharing scheme. As an example, high traffic volumes that are present in other ports may not be workable in other ports with lower volume traffic, e.g. one vessel call per week, less than 100 containers per month. Therefore, the sharing scheme must be revised by factoring in significant variables. However, he also agreed that CH operators must provide the necessary equipment. Mr. Tan added that the shipping lines are still open to negotiate with the CHO regarding the sharing scheme while AGM Cecilio countered that as long as there is such an arrangement, CHO will not buy the equipment. Further, he wanted the CHO to be pressured to buy the equipment since the procurement of equipment is part of the CHO’s commitment included in the CHO’s business plans.

  1. Continue the other agenda items indicated in the 11 May 2007 Meeting

The Revised Procedures in the Conduct of Public Hearing for Rate Increases and Revised Private Ports Regulation were agenda items includedin the 11 May 2007 Meeting. However, said itemswere not taken up during the 11 May 2007meeting due to time constraints andthe body agreed to discuss said items in the September 18, 2007 meeting.

6. DISCUSSION OF THE AGENDA

6.1 Revised Procedures in the Conduct of Public Hearing for Rate Increases

AGM Ceciliorequested Atty. Jean Ver Pia, OIC, FSRD, Franchising Office of the Maritime Industry Authority (MARINA) to presentthe 3rd draft of Revised Procedures in the Conduct of Public Hearing for Rate Increases for the Committee’s comments/suggestions.

The Committee agreed to the following revisions/corrections on the said draft PPA Memorandum Circular:

  1. On item “1.3”, “provide”shall be replaced by “create”, the phrase “who will be tasked” shall be added after the word “Secretariat” and “Port District Manager”shall be replaced by “Port Services Division Manager.”
  1. On paragraphs “a” and “b” of item “2.1”, the word “Note”shall be deleted. On paragraph “b”, the phrase “is likewise requested”shall be replaced by the word “shall.”
  1. Paragraph “c” of item “2.1”, “Corresponding filing fees should be paid. (c/o Tariff Committee)”shall be deleted entirely.
  1. On item “3.1”, the phrase “at least seven (7) calendar days”shall be replaced by the phrase “at least ten (10) calendar days.”
  1. On item “3.2”, the word “Note”shall be deleted and the phrase “is requested to identify other”shall be replaced by “may invite other.”
  1. On item “4.2”, the phrase “by the Moderator”shall be added after the word “hearing.”
  1. On item “4.5”, the phrase “all participants, witnessed by the PMO Manager concerned shall duly sign the same” shall be replaced by the phrase “all participants shall duly sign the same and witnessed by the Port Manager concerned.” Likewise, the sentence “Note: The PPA is requested to clarify what the participants will sign in case of an agreement” shall be deleted entirely.
  1. Item “4.6”, “The Public Hearing shall be conducted in areas where there are service providers” shall be deleted entirely.
  1. On item “5.1”, “seven (7)” shall be replaced by “ten (10).”
  1. On item “5.2”, the phrase “Port District Manager concerned/AGM for Operations” shall be replaced by the phrase “Port District Manager concerned and AGM for Operations.”
  1. On item “6.1”, the phrase “evaluate and” shall be added after the word “shall.”

The revisions/corrections as proposed by the Committee members on the draft Memo Circular shall be transmitted to the PPA’s Office of the Corporate Board Secretary (OCBS).

On item 2, “Application or Request for Rate Increase”, the PPA thru its Commercial Services Department (CSD) shall recommend/supply other bases/facts/information that need to be stated in the application/letter-request as well as identify documents/data to be attached to the applications or letter request for ease of evaluation.

6.2 Revised Private Ports Regulation

AGM Cecilio gave some background information on the revised regulation and asked Ms. Susara to present the 3rd draft of the proposed Memorandum Circular “Revised Implementing Regulations on Private Port Development, Construction, Management and Operation.”

Using a Powerpoint presentation, Ms. Susaradiscussed the following:

  • Salient Features of the Existing Guidelines (PPA AO 06-95);
  • Issues/Concerns in the implementation of the guidelines;
  • PPA Actions Taken re Proposed Amendments to the First draft AO;
  • Second Draft of Administrative Order;
  • Various Stakeholders written comments on the Amended AO 06-95;
  • Salient Features of the 3rd Daft revising AO 06-95;
  • New Provisions;
  • Enhanced Provisions andContents of the Revised AO.

After the presentation, the members gave their comments and suggestions, as follows:

Atty. Cruz inquired if the implementation of the revised circular is retroactive. Ms. Susara clarified that as in all PPA regulations the implementation is prospective. Ms. Susara solicited the Committee members’written comments or suggestions on the revised circular.

Mr. Tan suggested 25 nautical miles instead of the 27 nautical miles limitation in putting up a private port while AGM Cecilio replied that in the case of NorthHarbor and HarborCenter, the distance between them is much shorter than 25 nautical miles.

Mr. Ong inquired if the permit to operate a private port is renewable after 50 years. AGM Cecilio answered in the negative as private port shall be given a permit to operate for a period of twenty five (25) years but not to exceed the term of its foreshore lease contract. This may be renewable for another 25 years but co-terminus with the renewed foreshore lease contract agreement. He also emphasized that if the Department of Environment and Natural Resources (DENR) allowed the private port to operate in consonance with its foreshore lease contract with the said government agency, the PPA will not get back the private operator’s port facilities.

6.3 Other Issues

Ms. Susaraaskedthe Committee members for urgent issues for inclusion in the next meeting’s agenda. Mr. Tan requested for the status of the North Harbor Modernization and the Batangas Port Project. In the case of the North Harbor Modernization, AGM Cecilio informedthat there is a Court Order directing PPA to allow only qualified bidders to buy the Bidding Documents. In the Batangas Port Project, the bidding is suspended.

6.4 Agenda for the Next Meeting

The tentative agenda for the next meeting will be updates on North Harbor Modernization Project and Batangas Port Project.

9. Schedule of the Next Meeting

The next meeting is tentatively scheduled on November 9, 2007.

10. Adjournment

There being no other matters to discuss, the meeting was adjourned at 4:35 p.m.

Prepared by:Reviewed by:

IMELDA I. HILARIOEMMA L. SUSARA

Member, Secretariat andHead, Secretariat and

Senior Tariff Specialist, CSDManager, CSD

Noted:

BENJAMIN B. CECILIO

NPAC-CPO&T Chairperson and

AGM for Operations

Page 1 of 5(minutes of meeting no. 3-2007)

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