PCCI, other business groups urge Arroyo to rescind EO 59

Business groups have urged the Arroyo administration to rescind a controversial order issued by her predecessor and sort out the legal tangle that has disrupted the operations at the North Harbor to pave the way for the privatization on the country’s biggest domestic port facility.

Almost two years after ousted President Joseph Estrada issued Executive Order, (EO)59, the privatization of North Harbor has been stalled at least three times with no clear policy on how the facility would be turned over to private investors and how many operators would be allowed to run it.

In separate letters to President Macapagal-Arroyo, the country’s 79 biggest manufacturers of consumer products, the Philippine Chamber of Commerce and Industry (PCCI) and the 11-member Coalition for Ports Modernization asked government to issue a new order that would throw out EO 59.

According to Meneleo Carlos, PCCI vice president and member of the Export Development Council, business groups and industries affected by the stalled privatization of North Harbor all want the government to rescind EO 59 and set the policy direction that would encourage competition and foster transparency.

Carlos said government had long viewed port operations as a tool for generating revenues instead of public service. "There should be a fundamental change in attitude, ports should not be viewed as a milking cow," he said.

Carlos also said government’s failure to resolve the long-standing conflict and policy defects at North Harbor had contributed to the difficulties in making Philippine industries competitive. Hardest hit, he said, is the agriculture sector which has perennially lagged behind its competitors.

To correct the situation, Carlos said the PCCI is urging Arroyo to issue a new EO declaring a policy of competition that will allow multiple contractors to operate at the North Harbor and the conduct of an open public bid.

Carlos said allowing several operators to compete with each other would ensure that port rates would remain reasonable and encourage operators to outdo each other in terms of services to ensure their share of the market.

According to Carlos, a feasibility study conducted by Consilium International and commissioned by the PCCI indicated that with two operators at North Harbor, the return on investments (ROI) would still be at 30 percent.

"The president has to make a decision," Carlos said. "But I am optimistic that she is cognizant of the basic principles of competition and transparency."

Under EO 59, government had mandated the privatization of the port through a negotiated contract, with one operator taking over from the PPA under the build-operate-transfer scheme.

Later, government decided it would allow two operators but this decision was over turned by the Economic Coordinating Council which decided that only one operator would run North Harbor after all.
The final policy shift was made in November 2000, when upon urging of PCCI, government relented saying it would allow two or more operators to undertake the development of North Harbor.

The flip-flopping ultimately led to ICTSI’s decision to pull out of the consortium and junk its plan to even participate in the privatization of North Harbor.