By Mike Baños
TAGOLOAN, MISAMIS ORIENTAL – The expansion of the Mindanao Container Terminal (MCT) located in this town inside the PHIVIDEC Industrial Estate couldn’t have come at a better time.
During the estate’s 50th Anniversary in 2024, PHIVIDEC IA Administrator and Chief Executive Officer Atty. Joseph Donato J. Bernedo disclosed the facility already exceeded its original design capacity of 270,000 TEUs with container traffic expected to top 500,000 TEUs by 2030.
Just last year, the MCT attained another milestone, exceeding 300,000 TEUs for the first time, adding even more urgency.
Bernedo stressed the crucial role the MCT plays in the regional economy and the urgency of undertaking the MCT Phase II Expansion as soon as possible.
“I’m very keen on pursuing the expansion of our port. I want to have it finished during my time, or at least get it going because this is long overdue. We already reached maximum capacity in 2018,” he noted.
In previous discussions with the current port operator International Container Terminal Services Inc. (ICTSI), it was determined that the port’s expansion is urgently needed because the berthing windows when the ships dock have become very tight. This, on top of several expressions the authority has received from big international shipping lines who wish to ship through MCT, but whose preferred berthing windows cannot be accommodated, further stressing the urgency to immediately undertake the Phase II expansion.
“If we don’t expand there may come a time where we may also have to turn away the domestic shipping market, but we do not want that to happen, and we will do everything in our capacity to accommodate all the players,” Bernedo noted.
MCT History
With a 24-hectare terminal area for infrastructure, equipment and support facilities, a 300-meter berth originally designed to handle one international vessel measuring up to 200 meters, and an annual capacity of 270,000 TEUs, MCT is regulated by PHIVIDEC-IA and has been operated by ICTSI since 2008 when the Manila-based terminal operator signed a 25-year concession.
The US$ 85.34 Million (P 3.24 Billion) MCT was 85% funded by the Japan Bank for International Cooperation (JBIC), and 15% by PHIVIDEC IA, and designed and managed by Pacific Consultants International (PCI), and Japanese Contractor Mitsubishi-Kawasaki-Toyo Joint Venture (MKT-JV).
JBIC (now the Japan International Cooperation Agency or JICA) is a policy-based financial institution of Japan, and conducts lending, investment and guarantee operations while complementing private sector financial institutions.
Its Phase 1 construction, commissioning and operation was completed during the term of former Administrator Engr. Gabriel B. Evangelista, with Dante F. Clarito as the bidding committee chair, project manager during its construction, and interim port manager until ICTSI took over in 2008. PHVIDEC IA’s handling of the project was highly praised by the JICA Philippine Office in its 2011 annual report with a feature article “A Catalyst for Development”, and the Report of the Independent Public Accountants Asahi & Co.
JICA rated the Phase 1 construction of the MCT under the stewardship of PHIVIDEC IA as “A” (highly satisfactory) the highest level of evaluation given to its projects.
In the sidelines of the PHIVIDEC IA Open House Year 3 on March 25, Mindanao ICTSI President & CEO Aurelio C. Garcia disclosed CHEC (China Harbor Engineering Corp.), the contractor which won the bidding to undertake the port expansion has already set up camp in the area adjacent to the present port where the port expansion will be sited.
Catalytic Development
Bernedo said the growing traffic in the MCT has added even more urgency on immediate need for its expansion.
“Our volume has really increased, and we even experienced some congestion when the Bukidnon-Davao road was being repaired and all the traffic bound for Davao was diverted to us but we had solved that already. The opening of the PHIVIDEC-Alae Bypassed road significantly helped us in handling this,” Bernedo said.
From 271,795 TEUs in 2021, container traffic has grown to 304,422 last year, spurring port revenues from P367,436,813 in 2021 to P574,888,544, a growth of P207,451,731 or 56 percent over the last five years, PHIVIDEC Port Management & Development Director Gary C. Linsagan reported.
PHIVDEC IA’s share of the income from MICTSI’s MCT operations and regulated ports accounts for approximately 60 percent of the authority’s annual revenues. In fact, MICSTI has repeatedly been cited as one of, if not the estate’s top revenue contributor.
Key Expansion Details
MICTSI is investing USD 125 million to extend the berth by 300 meters, increasing capacity beyond 350,000 TEUs. The project, set for completion by March 31, 2028, will accommodate larger vessels and boost regional trade efficiency, supported by a 25-year concession extension until 2058.
The current 300-meter berth will be doubled to 600 meters to accommodate larger, more efficient vessels. The investment includes new cargo handling equipment, upgraded infrastructure, and new technology to improve operational efficiency. The project aims to handle increasing container volumes in Mindanao, catering to both import and export needs, particularly in the agro-industrial sector.
Currently, PHIVIDEC IA is in talks with the Environment Management Bureau Region 10 for a possible supplement or amendment to its present Environment Compliance Certificate (ECC) since the current ECC only covers the first 120 meters of the planned 300 meter berth extension.
However, Garcia said even when the first 120 meters of the extension is completed, this would already allow them to receive additional container traffic which can be handled by their present cranes through their existing container yard.
Three more quay side gantry cranes have been ordered along with four more rubber tired (RTG) gantry cranes for the expansion area which are now being assembled with the RTG cranes expected to arrive within the year or early next year.
Strategic Impact
The expansion supports the growing demand from Mindanao’s agricultural sector (pineapples, bananas) and connects northern Mindanao with global markets, including China and other parts of Asia. The terminal has also begun incorporating sustainable practices, such as using solar power, as part of its operations.
‘Our focus on operational efficiency, targeted capital allocation, and prudent financial management supported continued margin expansion and strong cash generation,” said Enrique Razon Jr., ICTSI chairman and president. He added that the company remains committed to financial discipline while investing in new projects.
“As we execute on strategic opportunities across our network and invest in new projects, we remain committed to maintaining the financial discipline and selective approach that have underpinned our track record of value creation,” Razon said.
The new berth will enable the shipping industry to deploy larger ships on new service routes to support growth and demand from Mindanao’s importers and exporters. Additionally, the expansion project will further promote PHIVIDEC’s agenda to grow its locator base.
“ICTSI is proud to continue our work at Mindanao Container Terminal, a critical hub for trade in southern Philippines,” Garcia said. “This extension allows us to implement our vision for the terminal’s future, with significant investments in new technology and infrastructure to meet the evolving needs of our customers and the region.”
The PHIVIDEC Industrial Authority and Mindanao International Container Terminal Services, Inc. (MICTSI) signed the Amendment and Supplement to the contract for MCT Phase II Expansion on December 19, 2024.
Bernedo said this reflects the organization’s commitment to growth and sustainability under the current administration. He further stressed that PHIVIDEC-IA will continue to expand through various projects and initiatives that are set to benefit not only Northern Mindanao but the entire country.
“We are not just shaping economies. We are shaping lives. This port will create jobs, jobs that put food on the table, educate children, and uplift families. It will attract industries, trade and investments, further transforming PHIVIDEC and Region 10 into a hub of opportunities,” he emphasized.
