PPP Conversations No. 11 with PPA GM Jay Santiago

Public-Private partnership (PPP) is not new to the Philippine Ports Authority (PPA). It has embarked, successfully at that, on the privatization of Manila International Container Terminal, South Harbor, Batangas and North Harbor.

PPA has its own PPP guidelines. PPA Administrative Order 03-2016 institutionalizes greater private sector participation (PSP) in the management and operations of ports. The current leadership in PPA, led by General Manager Jay Santiago, vigorously continues the PPA PPP/PSP legacy. He shares his thoughts in PPP Conversations.

What is your concept of PPP?

PPA’s PPP framework is anchored on its Charter and supports the exercise of its regulatory and developmental functions. This framework comprises the following modalities: build-operate-transfer; joint ventures; and port real-estate leasing. The privatization of the major ports has resulted in enormous improvement in the quality of services, not to mention the immense contribution that these terminals make to PPA’s revenue.

What makes PPP a viable and preferred development strategy for ports?

As a policy, priority is given to private-sector financing whether it be for the purpose of establishing a private commercial port or as an investment in government ports. PPP ensures fund generation, reduction in government spending, utilization of underutilized port facilities, complete delivery of port services, the upgrade of existing port facilities at no or minimum expense to the government and the dispersal of economic benefits to a wider area of the population.

Is PPA ready for PPPs?  Why? What are the projects in PPA’s PPP pipeline?

PPA has a good record of enlisting private sector support in the development, maintenance and operation of ports or delivery of port services. In the pipeline in PPA’s PPP program are the ports of Davao, General Santos, Iloilo, Cagayan de Oro and Zamboanga. South Harbor Expanded Port Zone is also a viable PPP initiative that has been in the PPA radar. Almost all of the ports have expired or about to expire cargo handling service contracts, which make them viable candidates for PPP.

What are the challenges and risks of ports related to PPPs?

Among the challenges that PPA has faced, and will likely still encounter along the way, are court cases and economic dislocation of affected employees.  PPA employees and those of existing service providers in ports concerned worry over the risks of being displaced and economically dislocated.  To cushion any adverse impact, PPA has ensured that service contracts of cargo-handling operators provide for the setting up of retirement funds.

What is your message to the public?

PPA would like to assure the public that it will be conscious all the time of the ports’ role in promoting connectivity between and among the country’s islands and with the rest of the world. Therefore, PPA will pursue programs that will provide the ports with the necessary facilities and equipment to serve vessels and handle passengers and cargo more efficiently.  Priority shall be given by PPA in tapping private- sector support, but it will be ready to do on its own essential projects where private-sector interest is nil or wanting.