$10 million opening bid set for Batangas port
The auction of the Philippines' Batangas Port, located south of Metro Manila, drew an opening bid of about $10 million for the first five years of the contract.
The state-owned Philippine Ports Authority finalized the terms of the scheduled mid-March auction last week. PPA aims to privatize the entire Batangas operation by December. The government hopes to develop the port into a major transshipment facility by 2010.
'According to the final ToR (terms of reference), it is $2.26 million per annum for the first five years. But for the succeeding years, we expect the price to escalate,' Benjamin B. Cecilio, PPA assistant general manager, told BusinessWorld in a phone interview Wednesday.
He said the agency deliberately lowered the floor price for the first five years of the 25-year contract to attract bidders. So far, no one has bit, according to the PPA. The agency said it was still in talks with Manila-based Asian Terminals Inc., which already operates four of the largest ports in the Philippines. ATI has been operating the port under a temporary permit since 2005.
PPA also said they have signed a purchase agreement with Chinese manufacturer Zhenghua Port Machinery Corp. for gantry cranes and other cargo-handling equipment worth $33 million. The equipment is set for delivery to Batangas in December.
The lack of cargo-handling equipment at Batangas' international cargo section has turned off investors and stalled the government's privatization effort for the port.
The agency had already shelled out some $144 million for expansion of the port. The government expects the port's cargo handling capacity to increase from a million tons a year to more than five million annually.