Philippines - Maritime Improvement Project

Report No. PIC3871 Project Name Philippines-Maritime Improvement Project Region East Asia and Pacific Sector Transportation Project ID PHPA4598 Implementing Agencies Philippine Ports Authority (PPA) PID Preparation Date February 21, 1996 Project Appraisal Date June 1996 Project Board Date December 1996 Objectives 1. The overall objectives of the proposed Project is to assist the Government in its efforts to: (a) improve the efficiency and performance of the Philippine maritime sector by addressing institutional and regulatory constraints, promoting competitive markets and behavior, and allowing increased private sector involvement, (b) improve the quality of services while reducing negative environmental impacts from activities in the sector; (c) support physical improvements required for the modernization of the sector. Description 2. The proposed Project consists of: a package of port reform measures; physical improvements in the port of Iloilo, measures to protect the marine environment; and technical assistance and training. It will be implemented over a five-year period from its inception. 3. Port Reform Measures: The project will assist Government in the development of a phased program to reduce, and ultimately to transfer, the economic regulatory powers of the Philippine Ports Authority to another Government entity; to reduce the role of the PPA in the operation and maintenance of the port facilities and the provision of port services in favor of the private sector, to devolve certain tertiary ports to local governments, to increase competition in cargo handling by relaxing the restrictions on entry, to introduce market- based pricing in the setting of port tariffs, and to let private ports compete with public ports for third party cargo, and to eliminate compulsory pilotage for domestic shipping in certain cases. 4. Physical Improvements: The physical improvements supported by the Project comprise the rehabilitation of the port of Iloilo. In Iloilo, the works to be carried out include the rehabilitation of the passenger wharf and the addition of berthing space at the international wharf. 5. Protection of the Marine Environment: The Project includes the procurement and installation of facilities and equipment for the collection (and disposal) of oily and solid ships' waste in the major ports. The Project would also develop the institutional mechanisms to manage these facilities, to provide incentives for their use and to  recover the operating and capital costs from their users. 6. Technical Assistance and Training: Technical assistance would be provided to assist in the construction supervision of port infrastructure works; in the establishment of an environmental monitoring unit within PPA; in the development of environmental mitigation systems for the reduction of maritime oil pollution and the disposal of ships' waste; in the improvement of port accounting and management information systems. The Project will finance an economic and technical feasibility study for the Port of Pulupandan and a master plan for the development of Cagayan de Oro Implementation 7. The overall coordination and monitoring of the project will be undertaken by the Department of Transport and Communications (DOTC). DOTC would also be responsible for the implementation of the legal changes, i.e. transfer of PPA's regulatory powers over ports to another regulatory entity of the Government and the modification of related legislation as well as the modification of the Government's Executive Order on Pilotage (EO 1088). PPA would be responsible for the implementation of the port related project components within its sphere of jurisdiction. It has formed a Project Management Unit to oversee the implementation of all port related components of the Project. In view of PPA's long experience with the implementation of Bank projects no major implementation problems are expected at this stage. Cost and Financing 8. The total investment to be made would be US$46 million (including contingencies), comprised of US$32.5 million for port works; US$8.0 million for waste reception facilities; and US$5.5 million for technical assistance and training. The IBRD loan would finance US$33.5 million, or 72.5w of total project cost (including about US$3.0 million of local costs). The balance of US$12.5 million would be financed by PPA. Environmental and Social Aspects 9. The proposed Project is not expected to cause serious adverse environmental impacts. However, the proposed rehabilitation of the ports of Iloilo will involve dredging of harbor areas. This has been evaluated and the appropriate measures to be taken to mitigate any adverse environmental effects have been identified. The installation of facilities for the disposal of ship's waste (including oily waste) in hub ports of PPA will contribute to a reduction of marine pollution from ships in Philippine waters. 10. The civil works will not require resettlement since the areas affected are uninhabited. 11. The overall project objective is to increase the efficiency of port operations and by so doing to reduce the total cost for domestic interisland transport as well as international ocean freight transport. These efforts would, in turn, promote economic growth in the areas outside of Manila -2-  12. Contact Point: Public Information Center The World Bank 1818 H Street N.W. Washington, D.C. 20433 Telephone No. (202) 458-5454 Fax No. (202) 522-1500 Note: This is information on an evolving project. Certain components may not be necessarily be included in the final project. - 3 -