Fri | Dec 9, 2016

Goat Islands port plans scare potential KCT leaseholders

Published:Wednesday | October 15, 2014 | 12:00 AM

Two of the three entities which prequalified for the grant of a long-term lease of the Kingston Container Terminal (KCT) have backed out, citing competition from the proposed Goat Islands port as a factor that could impact viability.

The two entities - the Dubai-based DP World and PSA, with head office located in Singapore - declined to submit tenders for the concession agreement which would see the winner financing, expanding, operating and maintaining the port.

Dr Omar Davies, transport, works and housing minister, told legislators yesterday that the entities had concerns "about the implications for the viability of the Portland Bight area".

He said: "This occurred despite a number of initiatives which were pursued by the Port Authority's management to protect the future viability of the KCT."

The Government is currently considering a proposal from China Harbour Engineering Company (CHEC) to establish a trans-shipment port at Goat Islands. The CEO of the Port Authority of Jamaica (PAJ), Professor Gordon Shirley, has said the ports would not cannibalise each other.

Yesterday, Davies, responding to I-told-you-so comments from Karl Samuda, said Dubai and Singapore have several ports and their individual viability was not affected by each other.

Meanwhile, Davies said that Terminal Link, a consortium jointly owned by CMA CGM and China Merchant Marine, has been selected as provisional preferred bidder. The minister said an evaluation of Terminal Link's bid revealed that it was not in strict compliance with the agreed guidelines.

NEGATIVE IMPACT

"It was found that while the financial forecasts satisfactorily reflected the price and throughput considerations, the requested amendments to the concession agreement negatively impacted the proposal," Davies said.

Nonetheless, the minister said Cabinet has given approval for a negotiating team to begin discussions with Terminal Link. The team, which has been given a month to conduct the talks, comprises former Bank of Jamaica Governor Derick Latibeaudiere, Shirley, businessman Earl Melhado, and Audrey Sewell, the permanent secretary in Davies' ministry.

Stressing that the offloading of the KCT would not be a fire sale, a point he said has been made known to Jamaica's multilateral partners, Davies said if no agreement was reached with Terminal Link, the Government would be seeking to engage other parties that have expressed interest subsequent to the termination of the tender process on July 31.

Davies also said that the KCT has been instructed to prepare and implement a plan to continue operating the facility. The plan, he said, should involve dredging operations.

daraine.luton@gleanerjm.com