LGUs seek higher share of port profits

SIX local government units (LGU) in Cebu province have requested an increase in their share of the profits from the ports they fund and operate, to 90 percent, with the Cebu Port Authority’s share to go down to 10 percent, from the prevailing 50-50 profit sharing arrangement, to open up another revenue opportunity for the funding of their projects and programs.

In a meeting on Wednesday, Oct. 5, 2023, Cebu Gov. Gwendolyn Garcia and the mayors and representatives of the LGU-operated ports in Bogo City, Tudela, Tuburan, Argao, Samboan and Dumanjug told Cebu Port Authority (CPA) General Manager Kit Comendador to consider taking only 10 percent as profit share from these ports.

According to a Sugbo News report, Garcia with Bogo City Mayor Carlo Martinez, Tuburan Mayor Democrito Diamante, Argao Mayor Allan Sesaldo, Tudela Mayor Jojo Solante, Samboan Mayor Emerito Calderon, and a representative sent by Dumanjug Mayor Efren Guntrano “Gungun” Gica explained to Comendador that the LGUs had funded the construction and operation of these ports.

Therefore, these LGUs must get the lion’s share of the profit and fees collected from the day-to-day operations of these ports, Garcia said.

Comendador explained that the prevailing policy was a 50-50 percent profit sharing between these LGUs and the CPA, but that the Cebu Port Commission, following an earlier request of the LGUs, had already approved the increase in the LGUs’ share to 80 percent and decreased the CPA’s share to 20 percent.

However, this 80-20 profit split had yet to be implemented pending the approval of higher management.

Comendador said he would endorse to the Cebu Port Commission for deliberation and resolution the LGUs’ request for a 90-10 profit sharing policy.

The Cebu Port Commission is the governing body of the CPA.

CPA’s reply

CPA public information officer Maryknoll Lague told SunStar Cebu on Thursday, Oct. 5, declined to comment on whether the decline in CPA’s share of the profits would affect its services and operations in these ports or whether the port authorities would consider the LGUs’ request, saying it would just await the final say of the Commission.

However, she clarified that the profit-sharing between the LGUs and CPA covers the collection of fees from wharfage, arrastre, stevedoring charges and berthing of every vessel and related operations in these ports.

Even though these LGUs handle the operation of these ports, the CPA still has the supervision function and collects its share of the revenues.

Mayors’ plea

Also on Thursday, Tuburan Mayor Diamante told SunStar Cebu that he is praying for the CPA’s Commission to grant their request as their port is undergoing complete overhauling, repairs and extension after it was severely damaged by Typhoon Odette (Rai) in December 2021.

Diamante said the approval of the request would reduce the burden on the town’s finances as the ongoing repairs of their port that were set to be completed next year were funded through a loan of around P200 million.

He added that the town’s port is not yet operational due to the ongoing overhaul and repairs.

“We are hoping that the Cebu Port Authority can give us a favorable sharing, considering that we took out a loan and have to pay interest, and then we still have to look for customers to use our port,” said Diamante.

Tuburan Port caters to passenger and cargo vessels going to and from Escalante City, Negros Occidental.

Strongly proposed

Tudela Mayor Solante urged the CPA to consider the 90-10 percent profit-sharing of his port’s revenues, saying that since the Jagutupay Port’s inception in 2003, it has been wholly funded, maintained and operated by the Tudela LGU.

Hence, he strongly proposed the 90-10 percent sharing, in comparison to the other Cebu mayors’ proposals of 80-20 and 85-15 sharing of profits.

The port not only connects the town to mainland Cebu but also has a direct route to the town of Pilar in Ponson Island then to Ormoc, Leyte, while it also serves as a docking port for a sand and gravel firm.

Tudela LGU has already spent close to P28 million in the construction and improvements of its port. Though he acknowledged the function of CPA under the law as a supervising and regulatory agency of all Cebu ports, he said it is rightful for his town to collect the lion’s share.

Double collection

There was also a concern on the double collection of fees in the port, as he received complaints from ship operators that were charged twice various fees by the CPA and the LGUs, resulting in confusion.

Hence, Solante stressed that it must be the LGU that will collect these fees, and it will just remit the profits due to the CPA.

He said the port collects monthly a revenue of about P100,000, making it one of the town’s highest sources of income while also employing his constituents.

The official said the revenue collected from their port is vital in funding other programs and projects of the town that will benefit his constituents.

Both Diamante and Solante expressed their gratitude to Garcia for supporting their cause to increase the revenue opportunity of their town through this proposed 90-10 profit sharing policy with CPA for the LGU-operated ports.