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Troubled Sasa conversion project hits another snag

Troubled Sasa conversion project hits another snag
Sasa is located on the island of Davao

The submission date for bids to operate a container terminal at Sasa port has been pushed back again.

The deadline was March 28, 2016 but, according to the Filipino newspaper Sun Star, it has been rescheduled until 30 days after final clearances from government agencies are secured.

The project to turn Sasa port into a container port has been repeatedly criticised by local business groups, who used the delay to urge potential investors to withdraw their bids.

These potential investors comprise a DP World consortium, Bollore Africa Logistics, ICTSI and a consortium involving APMT. Portek International withdrew its bid in 2015 after pre-qualifying.

Alexander Valoria, president of Anflocor Management and Investment Corporation, told the Manila Bulletin: “There is no need to convert Sasa Port to a container port. The container shipping requirements are already met by the existing private ports.”

These private ports include Davao International Container Terminal (DICT), Terminal Facilities and Services Corp. (Tefasco), Sumifru, Unifrutti, Dole/Pacinter and the planned Hijo International Port Services, Inc. (HIPS).

According to Valoria, 75% of foreign containers, accounting for 360,000 teu, already use these private ports while Sasa Port focuses on local trade.

Valoria added: “The PPP Project is based on unrealistic projections. The growth assumptions are extremely unrealistic.”

Hamburg Port Consultants (HPC), hired by the government, earlier estimated that container volumes in the Davao region will grow by 6.1% per year on average up to 2040 with a high of more than 20% frontloaded in the initial years.

Container throughput at Sasa Port, which has a 700,000 teu capacity, fell by 33% to 135,000 teu in 2014 and a further decrease was expected in 2015.

Jose Manuel De Jesus, president of Davao Integrated Port and Stevedoring Services Corp. (DIPSSCOR), an operator at Sasa port and an ICTSI-subsidiary, said: “At the Department of Transportation and Communications (DOTC) and PPP Centre projected growth rate of 6 percent we will take 15 years to bring it to 700,000 TEUs. So why the rush?”

“The port can be constructed in 24 months so why do we have to construct now when we still have excess capacity,” he added.

The project still needs to gain the approval of Davao City Council, which has reiterated its opposition to it.