Kingston Wharves' port expansion to cost US$50m
KINGSTON Wharves Limited estimates that its expansion will cost up to US$50 million ($4.4 billion).
But the cargo handler won't begin demolishing warehouses and dredging its harbour until early next year.
The company, which is undertaking the expansion to make room for additional cargo after the Panama Canal expansion is complete, has a two-and-a-half-year window to finish the project, by Grantley Stephenson's reckoning.
"For us, this is a major undertaking," said the company's CEO. The project can be done in 18 to 24 months, or just in time for the completion of the Panama Canal - scheduled for the first half of 2015.
Stephenson figures that synchronising its expansion schedule, and spending, with the canal expansion - which will allow cargo ships with three times the container capacity currently passing through the locks - is better for cash flow, and ultimately the bottom line.
As part of the redevelopment project, Kingston Wharves will remove and relocate some of its existing warehouses. Administrative buildings will also be moved and repositioned.
A new area for ships at the wharf will be created - the new berthing facility will be 7,969 square metres. Dredging to accommodate larger vessels at berths 5 through 6 will also take place.
The final part of the plan is to increase the cargo handler's stowage capacity by 41,437 square metres.
Currently, the cargo handler is in the technical review stage of its expansion. Consultation with engineers, detail design work and drawings are being worked on.
So far, estimates place the project cost between US$40 and US$50 million.
Kingston Wharves raised $1.8 billion by selling a 25 per cent stake in the cargo handler to Jamaica Producers Group (JP) at the beginning of the year to finance the expansion plans.
Though always on alert for new businesses, the focus is to grow its trans-shipment operations, Stephenson said. "It helps to insulate us from any problems in the local economy."
Jamaica's nearest competition for trans-shipment activity is Cuba, which is embarking on a US$800-million port expansion in Mariel.
That project is expected to lift Mariel's capacity from 350,000 20-foot container equivalents (TEUs) per annum to one million, to come on stream in 2014.
Stephenson believes Jamaica nevertheless has an advantage over other countries due to its "strategic location".
He added that the company is mindful that Jamaica has to be cost competitive and effective.