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The House of Representatives yesterday (Feb. 7) approved a government guarantee for four loans totaling US$111.5 million to finance the Port Authority of Jamaica’s fifth stage expansion of the Kingston Container Terminal.
These include a US$60.85 million loan from the Bank of Nova Scotia (BNS) Toronto to finance civil works; US$9.487 million from BNS Jamaica also to finance civil works; US$26 million from HSBC Bank to purchase straddle carriers and other container handling equipment; and US$15.1 million from China Exim Bank to purchase two ship-to-shore post gantry cranes.
Piloting the motion, Finance and Planning Minister, Dr. Omar Davies, explained that the indicative fixed interest rate for the BNS, Toronto loan was 5.6 per cent for 12 years, with a 24-month moratorium, while the BNS Jamaica loan attracted an indicative fixed interest rate of 8.75 per cent per annum over seven years, inclusive of a 24-month moratorium.
The interest on the HSBC loan is 5.48 per cent with 7.57 per cent for commercial loan, with nine and seven year tenors, respectively. Meanwhile, the China EXIM Bank loan’s interest rate is 5.4 per cent over eight and a half years.
Phase 5(A) of the Authority’s expansion programme include, among other things, the development of 64.83 hectares of land, the construction of 475 metres of berth, the acquisition of security equipment and 55 high mast lights.
Supporting the motion, Transport and Works Minister, Robert Pickersgill noted the recently signed five year, US$210 million contract with Maersk, the world’s largest container shipping line.
He said that phase five of the expansion programme was critical, as the Maersk contract included “a major obligation of the Port Authority to urgently provide appropriate capacity and facilities to satisfactorily accommodate the arrival of the first vessels to the terminal in April”.
He stated that, “the government is committed to providing significant support to the Port Authority in putting in place the physical and administrative programmes required to ensure that we meet our responsibilities, and there will be no slippage of schedule.”
Meanwhile, Opposition Spokesman on Finance, Audley Shaw noted the “sharply” reduced interest rates that have been negotiated for the loans, and said that with the exception of the local BNS loan of 8.7 per cent, the range of 5.48 to 5.6 on the majority of the loans, was commendable.