Oct 042014

Reference ID Created Released Classification Origin
2005-11-17 04:07
2011-08-30 01:44
Embassy Manila

This record is a partial extract of the original cable. The full text of the original cable is not available.



State for EAP/MTS and S/CT
Dept of Energy for NNSA – Kristen Astor

E.O. 12958: N/A
SUBJECT: Manila Port Readies for Nuclear Detection

REF: Manila 4541

Sensitive but Unclassified – Not for Internet – Protect


¶1. (SBU) Port operators and government officials
implementing the USDOE Megaports Initiative are eager to see
the program operational by mid-2006. Megaports is designed
to place equipment at major international ports to scan all
incoming containers for the detection of radioactive
materials and nuclear weapons (reftel). The implementing
agents for the program at two ports in Manila are
communicating well following their successful training
conference in the U.S. last month. They are drafting an MOA
to divide up responsibilities and working with USDOE to
address concerns over long-term maintenance costs,
productivity and revenue, and protocols for container
inspection. While port operators appreciated the ability to
support international security objectives, minimizing
business liabilities and risks and ensuring procedural and
financial accountability at both ports will improve the
efficacy and sustainability of the program. End Summary.

Support for Megaports

¶2. (U) Econoffs met with local port terminal operators and
GRP officials from the port authority and atomic energy
commission to discuss the current status and remaining
issues in the implementation of the Megaports Initiative in
Manila. The private and public sector representatives had
all returned from a training program in Washington State in
early October and expressed sincere enthusiasm for the US
Energy Department initiative. The operators said the
training was an introduction to equipment operation and
conceptual design, but they would be prepared to train
others in their respective offices once the equipment is
installed at South Harbor and the Manila International
Container Terminal (MICT). They understood the importance
of scanning all container traffic coming into the port for
radioactive materials because of the potential that the
Philippines could be a transit point for such weapons of
mass destruction. They expressed interest in expanding the
program to other Philippine ports so these materials do not
slip into the south “through the backdoor.”

¶3. (U) The Megaports Initiative is a program of the
Department of Energy’s National Nuclear Security
Administration (NNSA) to detect and interdict radioactive
materials and nuclear weapons of mass destruction at major
international ports. In the Philippines, the collaborative
initiative with the GRP aims to strengthen port security and
protect Philippine citizens from accidental or intentional
exposure to radiation. The USG and GRP signed a Memorandum
of Intent to implement the program in Manila on July 19,
¶2005. NNSA will install portals to screen rolling container
trucks and provide handheld equipment to further identify
materials in case an alarm is tripped. Only as a final
resort will the contents of the container be unsealed and
examined. The attendees explained that nearly all of the
alarm trips could be explained and dispensed by examining
the description of contents in the container manifest.

¶4. (SBU) At an earlier meeting, port operators told
econoffs that the Megaports Initiative was an important
collaboration between the US and Philippines. International
Container Terminal Services, Inc. (ICTSI) General Manager
Captain Andy Andrews said RP compliance would boost the
port’s international credibility. He believed that the US
Department of Homeland Security (DHS) is moving away from
rating countries and toward rating terminals. By
demonstrating a commitment to the Megaports Initiative, he
said, DHS may give ICTSI a high rating and allow it to fast-
track container shipments to the US. Andrews noted that
ICTSI currently has a lot more export business to the US
than its competitor Asian Terminals Inc. (ATI). His
counterpart at ATI, Senior Vice President for International
Operations Mark Ripka, said he hoped to attract more US
trade through his port and thought complying with the
Megaports program would boost his clientele numbers.

Small Waves in the Way?

¶5. (SBU) Philippine Port Authority (PPA) Manager Alex T.
Cruz told Econoff the various departments and offices
involved in Megaports implementation were communicating well
and had already begun to draft a Memorandum of Agreement
(MOA) to delineate each party’s role in implementation.
Although several issues needed to be resolved, Cruz said the
MOA would be discussed and signed well before the equipment
was in place. He said the PPA would adjust staffing
requirements and assign employees to the Central Alarm
Station (CAS) once the MOA is finalized.

¶6. (SBU) One of the lingering concerns for the team was the
maintenance of the equipment (reftel). Special Police Major
for the Bureau of Customs (BOC) Nicomedes Enad said it was
unclear who would bear the responsibility and the cost of
maintenance. Terminal operators recognized that spare parts
were not readily available in the Philippines and they
expected to run out of the initial allotment fairly quickly.
Ripka and Andrews assumed that they could recover
maintenance costs through PPA-mandated fees, but Cruz said
his organization had not committed to this arrangement yet.
Other operators remarked that the equipment may last only 5
years and expressed concern about replacing the equipment
and continuing the program.

¶7. (SBU) Both Cruz and Enad wanted USG assurances about the
operational impact of the initiative. The GRP reps did not
want to adjust container-handling fees as yet because they
were unsure how to calculate productivity, the anticipated
percentage of false alarms, or the length of time needed
each day to handle screening problems. Terminal operators
felt that these issues could dramatically affect planning
and profitability and requested GRP openness to possible
policy change once the program is running.

Operational Efficiency Main Priority

¶8. (SBU) While the training team agreed that terminal
operators must scan all container traffic, there may be
disincentives to compliance, particularly for ATI, whose
physical layout does not lend itself to conveniently located
portals. ATI’s Project Officer for International Operations
Alejandro dela Cruz said ATI often handles transshipments
where containers are offloaded from one boat and reloaded
elsewhere on the same pier. He speculated that it might
slow business if trucks must carry the containers through
the portals before loading them onto the second boat. Ripka
also complained of limited space for traffic flow to hold
trucks should a secondary inspection become necessary. He
added that delayed ships could clog the ports and agitate
customers who depend on timely arrivals and departures.

¶9. (SBU) Both port operators agreed that the initiative
would be financially feasible only if both operators imposed
similar conditions and fees. Ripka declared that not only
must API remain competitive with ICTSI but also with ports
in neighboring countries. The Megaports program might
impose bottlenecks in Manila while neighboring Asian
countries did not require the scanning. Andrews expressed
that charging fees is another opportunity for corruption and
argued for transparency and oversight.

Not Alarmed by Alarms

¶10. (U) The team is still discussing who would incur the
costs of a container examination, but believed that most
alarms could be resolved with a quick and unobtrusive
secondary inspection. According to Philippine Nuclear
Research Institute’s (PNRI) Nuclear Safeguards Head Julietta
(Jay) E. Seguis, a container that sounded an initial alarm
could undergo a secondary inspection with handheld equipment
to identify the radioactive substance in minutes without the
container being opened. Only cases involving a suspicious
material would warrant a tertiary inspection by PNRI reps.
Ripka stated that if the container held potentially
dangerous nuclear materials, he did not want to open it at
the congested port.


¶11. (SBU) USDOE will cover maintenance costs for three
years, during which time the GRP would prepare itself to
assume full responsibility. In an effort to promote
sustainability, the GRP is considering a screening tariff to
cover anticipated costs. Tariffs and decisions to inspect
boxes are not only security issues but also potential
avenues for corruption. Both port operators are looking to
the Philippine Port Authority and Customs for
standardization and transparency. The team hoped that
concurrent monitoring would enhance accountability.
Megaports discussions are also underway with neighboring
Singapore, Indonesia, Malaysia, and Thailand, and promoting
Manila as a regional Megaports leader may help bolster pride
and stimulate maintained interest in the program. The US
Megaports team plans to return to Manila in January 2006 to
conduct an engineering survey of the port, and hopes to have
the equipment installed and ready for testing before July.




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