Tue | Aug 22, 2017

KCT concessionaire draws down on US$56m of loans for port project

Published:Friday | March 24, 2017 | 3:04 AM

French shipping company CMA CGM drew down just over US$56 million, the equivalent of $7.2 billion, for the Kingston Container Terminal (KCT) development project, most of which appeared to have procured equipment.

The funds came from a US$265-million pool of loans that the shipping company will draw on, as needed, as the first phase of the KCT redevelopment is executed.

CGM CMA reported a growth in KCT's terminal equipment assets over six months, from US$9 million last June to US$103.4 million at its financial year ending December 2016.

CMA CGM and Terminal Link hold a 30-year concession for KCT, which they operate through a company called Kingston Freeport Terminal Limited.

The US$265 million of loans mature in June 2031.

"As at December 31, 2016, such financing has been partially drawn for an amount of US$56.4 million," according to CMA CGM's annual report.

The funds will finance the deepening of the navigation channel, reinforcing part of the existing quay and the procurement of new equipment to expand the terminal capacity from 2.8 million to 3.2 million TEUs, or twenty-foot equivalent container units.

Kingston Freeport plans to develop KCT as a strategic hub to take advantage of the widened Panama Canal, which can now transit super cargo ships.

The concessionaire is expected to invest approximately US$509 million over two phases of the concession, with the possibility of a third negotiable phase. Phase one of the port expansion, at US$259 million, includes capital dredging to a draught of 14.2 metres to be completed within five years, and strengthening of the existing quay walls to accommodate the larger vessels and equipment. This aims to increase capacity to 3.2 million TEUs.

Phase two involves a US$250-million plan for further dredging to a draught of 15.5 metres and to grow capacity to 3.6 million TEUs. Phase three, which is contingent on a future agreement, involves the development of a new deep-water berth with a draught of 15.5 metres.

The concessionaire will pay a fixed US$15 million per year as lease for the port, and a variable fee of eight per cent of gross revenues to the Port Authority.

CMA CGM's annual report outlined the KCT terminal equipment assets at year end as including: cranes, US$49 million; straddle carriers, US$19.3 million; dredging, US$17.2 million; various other equipment worth US$23.5 million; and capitalised costs of US$9.2 million.

steven.jackson@gleanerjm.com