New port seen to boost Cebu as trading hub

CEBU, Philippines —  The new Cebu International Container Port is seen to further bolster Cebu as a trading hub in southern Philippines.

Cebu has long been the trading center in Visayas and Mindanao regions.

The Philippines and South Korea signed on Monday a $172.64 million loan agreement for the construction of the new international container port in Cebu that aims to free up the existing seaport in the province and provide a more efficient and reliable transport infrastructure for the unimpeded flow of goods and services in the Visayas.

"The signing of the loan agreement is a positive development to support Cebu's economic growth in the years ahead," Mandaue Chamber of Commerce and Industry vice president Steven Yu told The FREEMAN yesterday when sought for comment.

"I believe that this project is long overdue," the official stressed.

"Cebu badly needs this project to ease congestion, increase efficiency and reduce total logistics costs," the businessman further pointed out.

Yu also said the project will help Mandaue City develop its reclamation area faster.

"With this, Mandaue City can also go full speed ahead in the development of the Mandaue City Reclamation Area as PUD (Planned Units of Development) 1 zone.

The local government of Mandaue has identified the North Reclamation Area as a PUD under its new Comprehensive Land Use Plan (CLUP).

"Great things are to come for Metro Cebu. Let us just hope that the implementation will be smooth and on schedule," Yu said.

Meanwhile, the Cebu port loan agreement was earlier signed by Finance Secretary Carlos Dominguez III and Sung-Soo Eun, chairman and president of the Export Import Bank of Korea (KEXIM).

The loan accord was among the five agreements signed during the President Duterte's official visit in South Korea earlier this week. 

The Cebu port project has a total estimated project cost of P10.1 billion (approximately $199.25 million) and will be built on a 25-hectare reclaimed land in the town of Consolacion in Cebu.

It will include a berthing facility with a 500-meter quay wall length that can simultaneously accommodate two 2,000 TEU (Twenty-foot Equivalent Unit) vessels; operating facilities and structures for containers such as a freight station and inspection shed; an access road and bridge; and a dredged waterway and turning basin.

Aside from the construction of physical structures, the loan also covers the procurement of cargo handling equipment and consulting services.

KEXIM-EDCF will extend the amount of $172.641 million (approximately P8.8 billion or 186.97 billion Korean Won) for the Port project with a preferential interest rate of 0.15 percent per annum for non-consulting services and zero percent for consulting services.

The loan has a maturity period of 40 years inclusive of a ?10-year grace period.

The Philippines, for its part, will provide a counterpart fund of $26.09 million (about P1.4 billion or 28.9 billion Korean Won) for the project.