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Logistics hub not contingent on expanded Panama Canal - Davies

Published:Monday | February 17, 2014 | 12:00 AM

JAMAICA'S WORKS minister, Dr Omar Davies, said stalled works on the Panama Canal will not make Jamaica a less attractive destination for logistics activities.

The builders of the canal stopped working two weeks ago on doubling the canal's capacity while a dispute rages over $1.6 billion in cost overruns and extra financing for the work, which is 70 per cent done and due to be finished next year.

The canal is due to be completed in December 2015.

"Although Panama is of importance, the fact is that the bigger ships are coming and they don't necessarily have to go through the Panama Canal. And in any event, the shipping lines will have to determine whether the fuel for the extra distance compensate for going through the different docks," Davies told The Gleaner.

Further development of the Kingston Container Terminal is expected to facilitate the passage of post-panamax container vessels with a nominal capacity of 12,000 TEUs in comparison to the existing Panamax vessels with a capacity of 4,500 TEUs currently transiting the Panama Canal.

TEU stands for Twenty-Foot Equivalent Unit, which can be used to measure a ship's cargo-carrying capacity.

The future of shipping

The Government is seeking to position Jamaica as the logistics hub of the Americas, and has moved to divest the Kingston Container Terminal, dredge and deepen the Kingston Harbour, and build out new port facilities in anticipation of the arrival of Post-Panamax vessels.

"There is no question that the ships are now significantly larger than they used to be. That (development in Panama Canal) is not going to affect all the different plans, not only in Jamaica but generally," Davies told The Gleaner.

The minister said there appears to be a lack of understanding of how the expanded Panama Canal will impact on Jamaica, pointing, for example, at comments which suggest that Jamaica's project may not be realised if the issues in the Panama canal are not settled.

"Some of the discussions border on the simplistic in suggesting that everything is dependent on Panama. If Panama comes in and you are significantly behind, then that is a factor. But it is not that all these decisions are contingent on Panama," Davies told The Gleaner.

The Tampa Tribune reported last week that Port Tampa Bay President Paul Anderson has indicating to the canal authority that it is prepared to take over the project if the impasse continues.

Tampa's port, the deepest in Florida, can handle the ships likely to transit the expanded canal, Anderson said. He noted that at the moment, cargo on Panamax ships is broken down and reloaded on to small vessels in Jamaica or the Dominican Republic before arriving in Tampa.

Anderson wants to divert business away from Jamaica to Tampa.

The Jamaica logistics hub is central to the government's economic growth strategy, aimed at driving investment and creating sustainable employment. The country will seek to capitalise on its location for increased maritime and aviation traffic through the region, with the opening of the expanded canal.