News

Kingston Container Terminal prepares for mega ships

To undergo $17-b expansion

BY INGRID BROWN Senior staff reporter browni@jamaicaobserver.com

Wednesday, March 16, 2011    

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PRESIDENT and chief executive officer of the Port Authority of Jamaica (PAJ), Noel Hylton says negotiations are underway with three of the world's largest shipping lines to provide Jamaica with far more business than the Kingston Container Terminal (KCT) is now able to handle.

As such, Hylton said some $17.2 billion (US$200 million) will have to be found to dredge the channel and turning basin to approximately 16 metres, expand the port into Fort Augusta to provide additional berthing of 1,500 metres, and develop 173 acres of yard space and value-added logistics capabilities.

"We are taking a bold decision to sign contracts to provide the service which we have not put in place as yet so it means between now and 2014, regardless of what happens, we have to put in place those things," Hylton said at a Jamaica Chamber of Commerce luncheon meeting at the Knutsford Court Hotel in Kingston yesterday.

This expansion, he maintained, is necessary if the port is to be fully equipped to handle the anticipated mega container vessels which are expected to call following the completion of expansion works on the Panama Canal.

Hylton, who was outlining the Port Authority plans to position the KCT to capitalise on the opportunities from the anticipated increase in cargo throughout the region, said only a few ports can accommodate these mega vessels.

According to Hylton, shipping experts are of the view that with the completion of the Canal, a large portion of the cargo that is transported by rail or road to the East coast or in the Midwest, will no longer be shipped to the West Coast ports because of issues such as congestion, inefficiencies and higher transportation cost.

Instead, an all-water service through the Panama Canal to the US East Coast will provide a more reliable transportation network.

"As a result the prognosis is that on completion, the Caribbean will likely be one of the greatest beneficiaries as it is expected that there will be a marked increase in the volume of trans-shipment cargoes traversing the region, which no doubt will result in more cargoes being handled at Caribbean ports," he said

Meanwhile, the PAJ boss said that only 70 per cent of the current capacity of 2.8 million 20-foot equivalent units (TEUs) at the KCT is being utilised, making it well poised to accept additional business.

"Not only are we well equipped to accommodate various vessels but we have the distinction of being the first terminal in the region to handle a 10,000 TEU vessel, such as the Zim Antwerp which made its maiden voyage to the Port of Kingston in February of last year," Hylton said.

The vessel, he said, was too large to transit the Panama Canal, hence Jamaica was the only port in the region — with the exception of Halifax in Canada and another in Virginia in the United States — that could handle the size.

KCT is said to have been rated number 62 among the world's leading ports following a $27-billion expansion, which has increased the capacity of the Terminal by some 600 per cent from the original 400,000 TEUs in 1975 to the 2.8 million TEUs at the end of 2008.

Hylton said that through effective marketing strategies, the port continues to enjoy a high level of trans-shipment cargo.

He said over the last five years the port has handled some 9.7 million TEUs. Of this amount some 8.3 million were for transshipment and the remainder domestic.

"Today Kingston Container Terminal handles an average of 190,000 TEUs of domestic cargo annually, while Kingston Wharves handles an average of 89,000 TEU," he said.

KCT, he added, releases approximately 190 domestic containers each day to the local clients.

"While our major focus has always been on the trans-shipment market, the volume of domestic cargo, which is driven by our economic activity has remained constant," he said, adding that this is forecast to grow at a rate of only two per cent per annum for the fiscal years 2011 through to 2013/2014.

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