POSTSCRIPT / August 2, 2007 / Thursday


Philippine STAR Columnist

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Who's favored to bag North Harbor contract?

GIANT DEAL: Some critical details of the bidding for the multibillion-peso contract to operate the North Harbor in Manila are reportedly kept away from the public, and even to some bidders, despite avowals of transparency.

Whoever bags this October the renewable 25-year contract will rake in enough billions that can buy protection and more favors under the current and future administrations.

The modernization of the country’s largest and busiest seaport is a top priority project of President Gloria Arroyo.

Its Terminal 1 will service roll-on, roll-off container and passenger vessels. Terminal 2 will service container and passenger vessels, while Terminal 3 will be for conventional, non-containerized, bulk or break-bulk vessels and passenger vessels.

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ORIGINAL SIX: The Philippine Ports Authority is bidding out the contract to a single operator that would in turn market its facilities to concessionaires.

Six groups secured eligibility documents after the PPA assured them that there is no way the bidding could be rigged and that the rules would not be bent for favored entities.

Those who expressed interest were Metro Pacific Investment Corp. (MPIC), Asian Terminals Inc. (ATI), Harbour Center Port Terminal Inc. (which later formed a consortium with Metro Pacific), Pier 8 Arrastre and Stevedoring Services Inc., Prudential Customs Brokerage Services Inc., and National Marine Corp.

Four of the six companies later dropped out. National Marine Corp., owned by the Magsaysay group, informed PPA that it would no longer bid, because negotiations with a possible foreign partner had failed.

Pier 8 Arrastre and Stevedoring Services Inc. failed to submit its bid documents. The Prudential Customs Brokerage Services Inc. was disqualified for submitting only one out of a required eight sets of documents.

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SUSPENDED: Only MPIC and ATI were left. But MPIC questioned ATI’s eligibility because the latter failed to submit the required waiver that the bidder will not sue the regulator (PPA) while the bidding is ongoing.

In turn, MPIC’s eligibility was also questioned because it submitted monthly, instead of quarterly, data.

Instead of proceeding, the PPA suspended the bidding without giving any explanation.

Raul T. Santos, assistant to the PPA general manager, was quoted as saying, “This means the bidding and awards committee has not made a decision yet. We don’t know if the eligibilities of the bidders are revoked, but as long as there is no official withdrawal, everything stays the same.”

Claro V. Maranan, PPA assistant general manager, agreed that there could still be questions regarding the provisions, terms of reference, and other issues regarding the contract being bid out.

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HABOL: The suspension was due to “strong pressure” from top PPA management, sources said. An influential group, which had not joined the pre-qualification procedure, reportedly wanted to insert itself in the bidding.

If true, this last-minute “habol” after some bidders had already been disqualified is a black eye for the PPA and the bidding and awards committee.

This is the sort of “palakasan” (the term does not mean “sports”) that has driven away legitimate foreign businessmen eyeing the Philippines as an investment location.

What for are the terms of reference and the basic bidding rules if they can be revised in the middle of the bidding? We never learn.

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MODERNIZATION: For more than a decade now, vested interests have been trying to corner the modernization project, currently called the Manila North Harbor Modernization Project.

The initiatives started during the term of President Fidel V. Ramos were scuttled when labor leader Democrito Mendoza of ALU/TUCP got the ear of the President in an election year to allow labor to participate.

In 1998, a consortium headed by Eusebio Tanco of Asian Terminals Inc. convinced then President Joseph Estrada to sign an Executive Order to hand over the entire Philippine port system to a single operator.

Later on, however, Mr. Estrada replaced his order with EO 308 calling for a multi-operator setup for the North Harbor.

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MONOPOLY: Under the Arroyo administration there were new appointments to the PPA board. The new members came from the EO 59 consortium, although the lead was reportedly taken by the Aboitiz group.

While the business sector is pushing for competition at the North Harbor, the PPA has been working to go back to its original idea for a single operator. Apparently the proponents of a monopoly are still influential.

In 2001, consultants were commissioned to study the feasibility of a multiple-operator setup. The consultants were instructed to provide for three operating areas, two of which were supposed to “provide similar or competing services.”

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NEDA OUT: However, in mid-2006, the consultants revised their report and recommended a single terminal operator. This came after the PPA offered to pay additional “fees” to the consultants.

The “sudden rush” now to bid out the North Harbor saw its being withdrawn from the usual evaluation of NEDA on the pretext that it was taking the review body a long time to approve the project.

With NEDA out, the stage was set for the immediate pre-qualification of bidders.

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GMA NOT TOLD?: The PPA’s failure to explain satisfactorily the bidding’s suspension has heightened suspicion that monkey business was ongoing.

I asked Vicente F. Gambito, a keen watcher of ports activities and an authority on the maritime industry, what all this means.

“One can only speculate that some powerful vested interest is again working behind the scenes,” Gambito said.

Since it is unthinkable that President Arroyo herself is pushing for a favored operator, he said it is possible that the President is not being informed fully of what is going on with her legacy project at the Manila port.

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(First published in the Philippine STAR of August 2, 2007)

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