Added by Marlon Madden on June 7, 2014.
Saved under Business, Local News
The majority of operations at the Barbados Port Inc. could soon be in the hands of private sector players, and the same could happen for the Sugar Point Cruise Terminal when it is constructed.
Chairman of the Port, David Harding, told Barbados TODAY the process of handing over some of the operations to the private sector had already started, and he expected it would save the Government millions of dollars over time.
Responding to questions at the just ended CIBC Infrastructure Conference at the Hyatt Regency in Trinidad, Harding told a room of mostly banking officials that private enterprise was already operating in the Port and more could soon be on the way.
Chairman of the Port, David Harding
“All of the stevedore services and their stevedore companies are all private. I believe that our Government is of the thinking that we should bring more private enterprise into the Port. I believe that the Government would rather be landlord and lease the Port facilities to private enterprise. Whether that private enterprise should be a shipping line or a group of local businesspeople in Barbados is not yet clearly known,” said Harding.
He also noted that the move to put more of the operations into private hands would “take away some of the strengths from the unions”.
“The unions feel that if they have a relationship with a particular Government that when they need to flex their muscles, the Government will flex their muscles alongside them and the whole activity of a Port [is] for creating jobs for the sake of creating jobs. No! We have the technology now that we don’t need half the people that we employ,” he said, adding that it was about getting the best delivery.
“So my position is that I think privatization will come to many of the Caribbean ports. It will come slowly, or bit by bit, at those ports that we say are the destination ports, but I think it will come,” he added.
He later told Barbados TODAY that a recent decision was taken to sell the two tugs at the Port to an international tug design and operating company, Svitzer. He said it would have been too expensive for the Government to replace them in a few years.
“That would be a huge capital investment . . . so the board agreed that they will sell the tugs to Svitzer and lease them back. Svitzer is a large operator of tugs. They do it here, all through the Caribbean; and we feel quite rightly that the taking over of the tugs by Svitzer not only gives us upfront cash, but it also tells us that when those tugs have reached their full age that Svitzer would replace them at Svitzer’s cost and continue to lease to us. So we would not have that major capital cost,” explained Harding.
He said it could cost as much as $26 million to replace each tug, but would not say how much the Government was selling each of them for.
Harding, a past president of the Caribbean Shipping Association, said the agreement was signed last month in Miami, following the Caribbean Shipping Association meeting.
“So that announcement is going to come out very shortly,” he added.
As it relates to the Sugar Point facility, Harding said the joint venture private partners in that operation would be SMI Infrastructure Solution Inc. and Royal Caribbean Cruise. However, Government will manage the docks.
“We will manage the piers and they, plus ourselves, would be [involved] in the commercial build-out because we have to create revenue streams outside of the departure head tax and marine charges to pay for the cost of this major project,” he said.
Harding gave the assurance that construction of the facility would begin the last quarter of this year.
“We are waiting on one piece of paper [from] the Ministry of Housing to give a kind of lease for the land to be reclaimed so that the bondholders would have some security when they invest in this,” explained Harding.
The project will be carried out in two phases, with phase one costing approximately $300 million, to be completed in two years.
The new terminal is expected to have capacity to berth some of the world’s biggest cruise ships and will be able to handle up to seven large cruise vessels a day.