‘PPA discouraging investors’

By VG Cabuag
Reporter

BESIDES failing to introduce real competition in the Philippine shipping industry, the chief of the country’s influential socioeconomic planning body blamed the Philippine Ports Authority (PPA) for helping bring up the cost of doing business in the country.

In an interview, Romulo L. Neri, director general of the National Economic and Development Authority (Neda), said the port agency should change the way it regulates the industry since it may discourage investments of prospective competitors.

Although Neri also identified other regulatory bodies, which he said were prone to “regulatory capture,” PPA was the only agency that was singled out for favoring existing players such as the International Container Terminal Services Inc. (ICTSI) and the Asian Terminals Inc (ATI).

Since both publicly listed companies have international cargo-handling operations in Manila, ICTSI and ATI have captured more than half of the Philippines’ cargo volumes.

“[PPA] should provide more competition in the market,” Neri said, adding that the cargo-handling rates charged by both port companies are high since only two operators are allowed in Manila.

To remedy the situation, Neri said that PPA should allow Harbour Centre Port Terminals Inc. (HCPTI) to have full containerized cargo operations. This will allow the company, controlled by businessman Reghis Romero, to directly compete with ICTSI, which runs the Manila International Container Terminal (MICT), and ATI, which operates the Manila South Harbor.

In May, three years after sitting on HCPTI’s application, the PPA board has completely precluded any future attempt of Harbour Centre to handle containers. The terminal’s original application only covered domestic operations.

Located right beside the Manila North Harbor, the domestic terminal has been allowed to accept international break bulk cargo, or shipments not stored in containers. Its foreign containerized cargo business is limited to its locators.

“If they resubmit it [petition to have full international containerized operations], we might even take their license for the locators,” a PPA official earlier said. PPA general manager Oscar M. Sevilla refused to comment.

According to Neda estimates, the ineffective regulation of the PPA and other agencies adds 25 percent to 30 percent to the logistical costs of doing business in the country.