Sasa Port withdrawn from PPP; new budget now under P5B
THE PHILIPPINE Ports Authority (PPA) is withdrawing the Davao Sasa Port redevelopment from the list of public-private partnership (PPP) projects approved by the National Economic and Development Authority (NEDA) Board to pave the way for possibly funding it internally at a greatly reduced cost.
PPA General Manager Jay Daniel R. Santiago said the agency has received approval from the PPA Board to study various plans to redevelop Sasa port with a budget of about P4.7 to about P4.9 billion.
“Definitely, we will abandon the proposed project which was recently approved by NEDA, which was P19 billion. We will not pursue it (at that budget level),” Mr. Santiago told reporters in a recent interview referring to the P18.99 billion Davao Sasa Port modernization project which was approved by the previous government.
The project could still be funded through a new PPP scheme with new terms of reference, although Mr. Santiago said PPA is also considering funding the project on its own.
“It is an option [ PPP] but at that rate, PPA is actually thinking that we can fund it from our own internally generated funds and continually operate Davao Sasa as a government port… PPA can fund it… I think by early next year, there will be some movement there, early part of next year we will have a decision on how to implement that,” Mr. Santiago added, noting that so far, “what is confirmed is the budget will be between P4.7 and P4.9 billion.”
The Department of Transportation (DoTr) said in October that it may stop the bidding to modernize and expand Davao’s Sasa Port due to its “unjustified” cost, replacing it with a scaled-down proposal.
The agency initiated a review of the project, which is among the PPP deals left unresolved by the previous government.
“There are arguments saying Davao Sasa should still be operated by the government in that area in order to make sure that port fees and cargo fees will be maintained. What is confirmed now is the cost of between P4.7 to P4.9 billion… whether that will be PPP, or not, or whether PPA will be the one to fund it and continue operating it, that will be decided shortly but it should not exceed the first quarter of next year, there will be movements in the Davao Sasa in terms of construction,” Mr. Santiago added.
The scaled-down cost means the project no longer requires NEDA Investment Coordination Committee approval, where the threshold is P5 billion. Projects under P5 billion can be approved by their respective implementing agencies.
“The Board instruction… is NEDA will be going to request for the closure of the proposed project so we can withdraw it from the NEDA because if the project exceeds P5 billion of course it will require NEDA approval, but since it will only cost between P4.7 billion to P4.9 billion, there will be no need to go before NEDA,” the PPA’s Mr. Santiago added.
Despite issues earlier raised against the P19-billion Davao Sasa project, the redevelopment proposal attracted five potential bidders: San Miguel Holdings Corp.APM Terminals Management (Singapore) Pte. Ltd. Consortium; Asian Terminals Inc. — DP World FZE Consortium; Portek International Pte. Ltd. — National Marine Corp. Consortium; Bollore Africa Logistics and International Container Terminal Services Inc.
The Regional Development Council (RDC) has identified the Sasa Port project as one of the priority infrastructure projects in Mindanao that needs to be implemented to drive growth in the industry and the services sectors.
The Sasa port project, along with the Davao International Airport, are two main gateways of the region that are due for major upgrades and are expected to significantly improve the region’s physical connectivity and boost its economic development.