Mon | Dec 5, 2016

SAJ demands transparency in KCT divestment- Agrees with Minister: 'No fire sale'

Published:Tuesday | February 24, 2015 | 12:00 AM
A section of the Kingston port.
A section of the Kingston Container Terminal.
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The Managing Committee of the Shipping Association of Jamaica (SAJ) has given its full support to the efforts of the Government of Jamaica to divest the Kingston Container Terminal (KCT), even while it joins with Minister of Transport and Works Omar Davies in rejecting any idea of a "fire sale".

The SAJ Managing Committee, officially its board of directors, said it was concerned that all given deadlines for the privatisation process had been missed and calls upon the Government to provide an update to the nation and the industry on the process. The association said it was willing and ready to use its experience in the global shipping industry to participate in the negotiations should the Government believe there is a role for the association to assist.

The SAJ leadership said it took note of concerns expressed by workers at the container terminal in newspaper articles released over the past two weeks and said that it shared the concern of the workers regarding the lack of information about the divestment process.

 

need for transparency

 

It explained that while the association appreciated the need for confidentiality in negotiations, the authorities should be reminded that the Port of Kingston is one of the most precious assets of the people of Jamaica and there is need for transparency, at least in establishing the minimum conditions of sale. It said it would not support a fire sale, which valued the port without due recognition of its importance in the global supply chain. Similarly, the SAJ said the nation needed to be reassured that any agreement for sale would treat the Jamaican private investors in public wharves no less favourably than the proposed foreign terminal operator.

 

investment welcome

 

The SAJ emphasised that it welcomed foreign investment, which would serve to confirm the confidence that Jamaican investors have shown in the shipping, ports, and logistics industries in Jamaica for nearly a century.

However, without having details of what is on offer, particularly after the bidding process was shelved in favour of a negotiated sale, the SAJ is concerned that if the port is sold at an undervalued price and on terms less favourable to the rest of the industry, the KCT may fail to contribute meaningfully to the Government's stated aim of expanding the shipping and logistics industries. It said that the KCT was currently an international hub port and the Government should seek a guarantee that the terminal would continue to be operated as such to ensure that it served a dynamic role in helping to develop the Government's logistics hub project.

The association said that it recognised that secrecy is a necessary aspect of negotiations; but there is no conflict between maintaining secrecy and advising the nation of the minimum conditions that the country should expect in divestment of such a prime strategic asset.

 

what is the real value?

 

"How is KCT expected to contribute to the expansion of the logistics hub concept? Will it cannibalise the already declining business that the island is experiencing, or will it add real value? What is a foreign investor expected to bring to the table? What is Jamaica's best alternative to a negotiated settlement with the sole foreign bidder? These are questions that must be foremost in the minds of the negotiators, but the answers should also be shared with the country," the managing committee stated.

The Shipping Association of Jamaica was founded in January 1939 to represent companies across the spectrum of the shipping industry. Its 70 members include the Kingston Container Terminal as well as shipping agents, stevedoring contractors, the port hauliers, brokers, and Kingston Wharves Limited, the other major terminal operator at Port Bustamante. Kingston Wharves, unlike the KCT, is a private port operator, listed on the Jamaica Stock Exchange.