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Davies: Goat Islands project needs another five years

BY BALFORD HENRY Senior staff reporter balfordh@jamaicaobserver.com

Friday, February 28, 2014    

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MINISTER of Transport, Works and Housing Dr Omar Davies says there is no likelihood of China's proposed Goat Islands investment coming on stream within five years.

"The port is not expected to be engaged in trans-shipment activities for several years yet," Dr Davies told the House of Representatives, in a statement on Tuesday.

"It will require time for technical development after the signing of the implementation and concession agreements prior to the start of construction, and another period for construction," he stated.

"Assuming that the agreements will be concluded about a year from now, the port will not be in operation for approximately four years. It is also expected to be limited in scope at the start," he added.

Davies, who was speaking on the issue of competition between the Chinese proposed development, and the planned privatisation of the Kingston Container Terminal (KCT), noted that, on the other hand, the KCT concessionaire will be acquiring a going concern with excess capacity and with the ability for that capacity to be expanded within a short timeframe through changes to the equipment at the terminal.

He said that the lead time prior to the start-up of the China Harbour Engineering Company (CHEC) terminal was more than sufficient for a global terminal operator to establish the necessary volumes and to entrench itself in the regional maritime trading arrangements.

He explained that the CHEC project is, first and foremost, an industrial complex with an associated port to support the activities of the zone.

"The port will be a mixed-use facility. It is proposed that it will house the assembly plant for cranes and other port-related equipment. It will also serve as the home base for CHEC's dredging and harbour-building equipment, for use in projects throughout the hemisphere," he stated.

Dr Davies said that it was essential for all Jamaicans hearing his presentation to appreciate the following:

* Even if Jamaica did not pursue the CHEC proposal, the company is likely to implement the project elsewhere in the region, and there are many countries willing to accept an offer from CHEC to develop the industrial complex and port in their country;

* The global pattern is for major shipping lines (and in particular the integrated arrangements among the major carriers, such as the P3 arrangement between the top three lines) to have their own terminals. It is not usual to have more than two of the top lines being managed out of a single terminal. The fact that Jamaica may have two terminals would serve the country in good stead in establishing itself as the major trans-shipment terminal in this region; and

* The model of development for the terminals is expected to be different and no overlap is envisaged.

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