COA questions PPA's white elephant ports

By Rainier Allan Ronda (The Philippine Star) Updated July 12, 2011

MANILA, Philippines - The Commission on Audit (COA) yesterday questioned the Philippine Ports Authority’s (PPA) “white elephant” traditional port construction and expensive maintenance projects in the past years.

However, the PPA continues the expensive projects, invoking the government’s need to invest in government infrastructure to promote trade and economic activity.

In a 2009 COA report, auditors had already called the attention of PPA officials over the port construction projects valued at P520.76 million which the agency found to be “financially non viable and unable to spur economic growth in the area” where they were built.

Among these financially non-viable ports were the Orion Terminal port in Bataan, the Dingalan Terminal Port in Nueva Ecija, the Canalate seaport in Malolos, Bulacan, the Santa Cruz seaport in Paombong, Bulacan, and the Masantol River Wharf in Pampanga.

“We evaluated the viability of the newly constructed ports on the basis of the revenues generated for the year and we observed that the earnings were very minimal. The summary of revenues by piers and tariff items for the year 2009 showed that the Orion and Dingalan Terminal ports generated revenues of only P689,286 and P72,251, respectively,” the COA report said.

In the 2008 audit of PPA, COA had already raised concerns on the thrust of the agency to build new ports, especially in places where they cannot reasonably be expected to be viable.

“Ports developed at a cost of P1.06 billion are unutilized or underutilized and the continuous operation and maintenance of which is disadvantageous to the PPA,” the COA said in one of their value-for-money audits in 2008.

Of the 18 ports built by the PPA during that time, the COA noted that most, if not all, ended up being idle or “counterproductive” assets, which need regular costly maintenance.

The controversial Pulupandan port in Negros Occidental emerged as the most expensive project worth P416 million.

“It appears that management has not gained success in reviving port activities at the Pulupandan port which was renovated and completed on Sept. 29, 2006 at a cost of P416,160,737,” COA noted.

COA warned the PPA officials that the maintenance of the unviable ports affects the financial position of the port agency.

“The objective of spurring economic development in the localities appears not in the near future and continuous operation and maintenance of the assets may adversely affect the operation and programs for implementation of the PPA,” COA said in 2008.

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