Project Study On NCICP

MUNICIPALITY OF CONSOLACION
Office of the Municipal Mayor

Consolacion Government Center
Poblacion Oriental, Consolacion, Cebu
PROJECT STUDY
Project Title: The New Cebu International Container Port

Project Location: Consolacion, Cebu
Project Cost: $172.64M
Project Background & Necessity

The Study of the development of The New Cebu International Container Port was started with
the JICA report, ”The Study on the Cebu Integrated Port Development Plan in the Republic of the
Philippines” in 2002 In the JICA Study the short-term and long-term development plans were
proposed including preliminary design, cost estimate, economical/financial analysis and
environmental and social impacts assessment. After the JICA report in 2002, a study on the
feasibility of Japan’s ODA loan, which focused particularly on STEP ODA in 2003, was conducted
by the study group which was commissioned by the Ministry of Economy, Trade and Industry in
Japan.
In the study report made by JICA in 2004, “The Study on the Master Plan for the Strategic
Development of the National Port System in the Republic of the Philippines,” PPOSS (Philippine
Port System Strategy) worked out a strategic national port master plan with the target year 2024
and an urgent development plan with the target year 2009. Cebu Port is designated as one of six
major national gateway ports (major ports for international container
trade) in this national plan.
In addition, Economic Research Institute for ASEAN and East Asia (ERIA) issued a report in 2010,
“The Comprehensive Asia Development Plan,” in which Cebu Port is also identified as the major
port of the Philippines that needs to be developed urgently. However, due to a policy change by
the proponent of CPA, a proposal for development by a private investor and
no agreement by the local government, development of The New Cebu International Container
Port has not materialized.
Ten years have passed since the JICA study in 2002. Nowadays, the congestion has become more
serious due to increasing cargo volume. The congestion of the international and domestic
container terminals is remarkable. In order to handle the increasing container cargo, two
quayside gantry cranes installed in 2003 were increased to four gantry cranes in 2010 and will
increase to five gantry cranes in 2012 with seventeen RTGs. For other cargoes-except containers,
due to the very narrow apron area, congestion during the loading and unloading is much more
serious. Therefore, the efficiency of cargo handling decreases and the safety of port operations
will become an issue.
According to information from the shipping companies, the water depth in front of the wharf is
too shallow for efficient and economical international shipping operation from/to Kaohsiung,
Pusan, Hong Kong and Singapore. They have a lease contract for empty container stocking in the
city proper because of the lack of available land in the terminal. Deepening of the berth to
accommodate bigger container ships is very difficult because of the structure of the berth, pier
type with a retaining wall. Expansion of the wharf into the sea is also difficult due to the narrow
strait between Cebu Island and Mactan Island.
The Aquino Government started in 2010, announced that national projects should utilize a PPP
scheme in order to reduce the governmental burden by introducing private investment. DOTC
follows the same policy and is examining their handling projects on the practicality of introducing
PPP schemes. In this Study, the past study JICA 2002 is reviewed taking into account the recent
economy and port surrounding conditions. Then, the Project will be renewed applying a PPP
scheme, i.e., survey how we can introduce private investment to the Project considering finance
methods and procedures.
On the other hand, the cooperating proponent, Mitsubishi Corporation, intends to participate in
the operation of the new container terminal as one of the Japanese groups considering
partnership with Filipino companies and to confirm the realization of the Project. Another
proponent, Nippon Steel Corporation, intends to participate in the supply and construction of
the large steel pipe sheet pile type structure for The New Cebu International Container Port. This
Study examines and evaluates the various procedures for construction of the New Cebu
Container Terminal and for port development and shall provide a proposal with action plans from
the viewpoints of the private firms in order to ensure implementation.
Description of the Project

The New Cebu International Container Port will be constructed to cope with the congestion of
the existing Cebu port and the shallow water depth of the container berths. The redevelopment
of the existing Cebu port will be implemented including vacant area of the container terminal.
The component of the new Cebu port is to construct international container berths, container
terminal and port related facilities and existing port is to construct expansion of berth, floating
passenger berths, domestic container terminal and passenger terminal.
Selection of the Site for the New Cebu Container Port

In the 2002 JICA Report, five candidate sites were proposed. As the PPP scheme is assumed for
this project, the estimated construction cost is used as the most important factor for evaluation
of the site selection even though other factors such as ease of access to the New Port and safe
navigation of the ships are also important. To compare the sites, rough port planning was done
to calculate the major volume of quantity such as dredging, reclamation, container berth and
breakwaters to estimate the construction cost. The Consolacion site is the most economical and
recommendable considering evaluation factors. Therefore, the preliminary design, cost estimate
of the Project implementation, and economical and financial analysis were made based on the
Consolacion site.
Preliminary Design
The location of the reclamation area was moved to the south about 200 m from the location
noted in the JICA study in 2002 in order to minimize dredging volume. The major structure of the
container berth was designed based on the existing seabed elevation and soil condition and it
was found that steel pipe sheet pile type with 17 anchor pile is the most economical and suitable
for the new container port. Two traffic lanes are required for each direction based on the traffic
forecast and a bridge type superstructure in the coastline area and a cutting mound type road
near Cebu North Coastal Road is recommended. The typical substructure type will be multi-
column with a pier-head type pier and a bored pile foundation. The column section will be a
circular shape, especially in the seashore area, to minimize the streaming inhibition because it is
the most economical and widely used in the Philippines.
Construction Cost
The Project cost estimated for the construction of The New Cebu International Container Port
and the redevelopment of Existing Cebu Port separately. The Project cost consists of civil work,
building, utilities, container handling equipment, detailed engineering cost, construction
supervision cost, right of way acquisition cost and administration cost. Based on the plan of The
New Cebu International Container Port and the redevelopment plan of Existing Cebu Port, rough
quantities were calculated for the facilities and estimated the cost. Cost of right of way for the
access road is estimated using the current price of the public works.
Environmental and Social Impacts

For the assessment of environmental issues, dredged materials from The New Cebu International
Container Port will be disposed in the deep sea. In order to mitigate seawater contamination, a
silt protector should be provided during the disposal of the dredged material. There is small area
of mangrove trees in the proposed site. It is assured that the number of new mangrove trees that
are planted will exceed the numbers that are cut down during the construction as instructed by
DENR.
Justification of the Project

The justification of the Project is evaluated by studying the following items.
a) Study of Investment Demarcation between Public and Private

In general, in the Philippines, fundamental facilities are the responsibility of the public while
operation is the responsibility of private companies. Firstly, construction costs, which should be
kept as low as possible, reclamation costs, which need an application to the central government
for approval, berth cost and pavement costs, which are relatively high, should be burdened by
the public. Private institutions should shoulder the over investments and expenditures as much
as possible. Whether funds for facilities are to be provided by public or
private sectors, should be studied through pattern analysis.
b) Implementation Schedule
Based on the above demarcation, the implementation schedule is verified by each demarcation
and reviewed for expected completion and commencement of operation based on the demand
forecast.
c) Evaluation of Finance
The possibilities to realize the both project for construction are studied including the case study
of the facilities to be shouldered by public or private.
d) Contributed Economic Effectiveness

The contribution to economic effectiveness is considered and verified in the cases with execution
and without execution.
Submitted by:
DR. NERITO A. MARTINEZ

Consultant on Special Projects
Approved by:
HON. JOHANNES P. ALEGADO

Municipal Mayor

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MUNICIPALITY OF CONSOLACION

Office of the Municipal Mayor

Project Title: The New Cebu International Container Port

Project Background & Necessity

Description of the Project

Selection of the Site for the New Cebu Container Port

Environmental and Social Impacts

Justification of the Project

a) Study of Investment Demarcation between Public and Private

d) Contributed Economic Effectiveness

DR. NERITO A. MARTINEZ

HON. JOHANNES P. ALEGADO

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