New BOC procedure could delay coal supply to power plants

By Myrna M. Velasco – January 2, 2019, 10:00 PM
from Manila Bulletin

A new and longer procedure being enforced by the Bureau of Customs (BOC) on cargo shipments could delay fuel deliveries to the country’s electricity generating plants and could also increase the pass-on cost to consumers.

A highly probable worse case scenario, according to power firms, will be “shortage of coal inventory for generators,” – and this could ignite power supply shortages or rolling brownouts.

Under the old procedure of the BOC, shipments’ clearing could be done within three days; but in the Customs bureau’s new rule, that has been prolonged to 18 days.

Power generators are thus worried that their coal shipments could be obstructed because of the longer process of cargo receipt to registration – all the way to the lodging of the shipping line bringing the cargoes.

According to power firms affiliated with the Philippine Independent Power Producers Association, Inc. (PIPPA), “the new rules of the BOC pose major bottleneck to the industry,” qualifying further that such “will cause delays on arrival of coal shipments, parts and tools.”

In cases wherein power generating facilities had to go on shutdown due to technical hiccups and parts are needed to be procured offshore, it was explained that the same will be affected by the lengthy procedure of the BOC.

Under the new policy, it will take one day to send email to the Cargo Data Exchange Center (CDEC) for the issuance of Client Profile Registration System. Following that, the CDEC will then issue the unique reference number (URN) – which is a 3-letter code – and such will have to be dispatched via email at the BOC-Account Management Office (AMO) and to the shipping line.

The next phase is seen most problematic by the industry players as such could take roughly 15-16 days to complete the entire process. This will cover AMO’s request to the BOC Intelligence Group for assessment of the shipment; and after assessment, such will then be forwarded to the Office of the BOC Commissioner for approval.

The last stage in the process – which may take another day – is the approval and activation of the issued URN; that essentially will be the trigger to the shipping line that it can already unload the shipment.

According to the power plant owners and operators, the modified BoC policy on shipments will “delay the lodging of import entries,” which fundamentally could affect their operations.

Given such circumstances, they likewise raised “potential additional demurrage costs and port expenses,” thus, increasing also the eventual pass-on cost to electricity consumers.

The power companies similarly aired that the protracted process of shipment’s clearing will have “implications to contractual commitments of generators.”