ICTSI plans to focus on ASEAN until Manila decides on expansion policy
MANILA's International Container Terminal Services Inc (ICTSI) plans to expand in ASEAN, holding back on expansion at home while awaiting clarity from government on whether to focus on Manila or Subic.
Christian Gonzalez, ICTSI Asia-Pacific subcontinent chief, told reporters at the 14th MAP conference in Manila that the company has proposed a 20-year contract to run the Negara terminal in Burnei, which it now renews on the short-term basis.
Mr Gonzalez said ICTSI has also repeatedly proposed to the government of Indonesia to take control as concessionaire and not just a subcontractor of the port operations in that country.
Mr Gonzalez said he sees Indonesia as most profitable and viable if port operations are structured the right way, reports Manila's Malaya Business Insight.
"We are proposing the expansion of scope, expansion of areas in Indonesia where we operate in Jakarta and Makassar. The way it works in Indonesia is that it has a national port operator, which gets the concession from the port authority.
"The national port operator then subcontracts the operations to private local and foreign firms," said Mr Gonzalez, adding that ICTSI wants to be the operator in control.
"You cannot drive change and create benefits without having control. This is why we divested from India, from Japan because we want to take control of the terminal," he said.
He said ICTSI is also looking at opportunities in Myanmar and in Cambodia.
"The problem in Myanmar is that along the river, there are so many small ports, some have facilities, some don't. Some have systems and others don't. It's complicated. Some [ports] have cross ownership with government, others are private. It might be better to use the money somewhere else," he said.
Meanwhile, ICTSI wants clarity where government wants the expansion of the main ports.
"The direction from the DOTr (Department of Transportation) is not clear. It is in our contract to expand MICT [Manila], and we are keen to expand. We understand the fact that perhaps expansion should happen in Subic but that decision has to be taken," Mr Gonzalez said.
"The first thing the government promised is to ease traffic in Metro Manila. The key is to limit the number of trucks. MICT has done this through the terminal appointment booking system and better efficiency. We are not going to expand until we are clear on the understanding that it is what government wants. It is a government concession," he said.
But Mr Gonzalez admits Subic is gaining a lot of traction and has so far taken away 100,000 TEU in 2015 from MICT, due to lower base and royalty cost.
The port has a lot of capacity and can actually take in another 150,000 to 200,000 TEU more from growing, though not as fast, requirements from Region 3 particularly Bataan and Zambales and north of Metro Manila.
Subic port, operated by unit Subic International Container Terminal, has a capacity of 600,000 TEU.
But Mr Gonzalez said Manila remains to be a key port, with 70 per cent of cargo going through MICT consumed in Metro Manila.
Mr Gonzalez said he is willing to sit down with government in crafting a unified logistics master plan but noted the need to build more roads, complement this with other modes of cargo transport (water and rail) from the ports where cargo can be distributed in trucks and even smaller vans to warehouses and other points of destination.
In other ports, ICTSI expects the operation of four abroad within the year: Congo, Australia, a new portion of the port in Iraq and Colombia.
MANILA's International Container Terminal Services Inc (ICTSI) plans to expand in ASEAN, holding back on expansion at home while awaiting clarity from government on whether to focus on Manila or Subic.
Christian Gonzalez, ICTSI Asia-Pacific subcontinent chief, told reporters at the 14th MAP conference in Manila that the company has proposed a 20-year contract to run the Negara terminal in Burnei, which it now renews on the short-term basis.
Mr Gonzalez said ICTSI has also repeatedly proposed to the government of Indonesia to take control as concessionaire and not just a subcontractor of the port operations in that country.
Mr Gonzalez said he sees Indonesia as most profitable and viable if port operations are structured the right way, reports Manila's Malaya Business Insight.
"We are proposing the expansion of scope, expansion of areas in Indonesia where we operate in Jakarta and Makassar. The way it works in Indonesia is that it has a national port operator, which gets the concession from the port authority.
"The national port operator then subcontracts the operations to private local and foreign firms," said Mr Gonzalez, adding that ICTSI wants to be the operator in control.
"You cannot drive change and create benefits without having control. This is why we divested from India, from Japan because we want to take control of the terminal," he said.
He said ICTSI is also looking at opportunities in Myanmar and in Cambodia.
"The problem in Myanmar is that along the river, there are so many small ports, some have facilities, some don't. Some have systems and others don't. It's complicated. Some [ports] have cross ownership with government, others are private. It might be better to use the money somewhere else," he said.
Meanwhile, ICTSI wants clarity where government wants the expansion of the main ports.
"The direction from the DOTr (Department of Transportation) is not clear. It is in our contract to expand MICT [Manila], and we are keen to expand. We understand the fact that perhaps expansion should happen in Subic but that decision has to be taken," Mr Gonzalez said.
"The first thing the government promised is to ease traffic in Metro Manila. The key is to limit the number of trucks. MICT has done this through the terminal appointment booking system and better efficiency. We are not going to expand until we are clear on the understanding that it is what government wants. It is a government concession," he said.
But Mr Gonzalez admits Subic is gaining a lot of traction and has so far taken away 100,000 TEU in 2015 from MICT, due to lower base and royalty cost.
The port has a lot of capacity and can actually take in another 150,000 to 200,000 TEU more from growing, though not as fast, requirements from Region 3 particularly Bataan and Zambales and north of Metro Manila.
Subic port, operated by unit Subic International Container Terminal, has a capacity of 600,000 TEU.
But Mr Gonzalez said Manila remains to be a key port, with 70 per cent of cargo going through MICT consumed in Metro Manila.
Mr Gonzalez said he is willing to sit down with government in crafting a unified logistics master plan but noted the need to build more roads, complement this with other modes of cargo transport (water and rail) from the ports where cargo can be distributed in trucks and even smaller vans to warehouses and other points of destination.
In other ports, ICTSI expects the operation of four abroad within the year: Congo, Australia, a new portion of the port in Iraq and Colombia.