JIS News

The Port Authority of Jamaica is to proceed with the construction and development of the Falmouth Cruise Ship Terminal in Trelawny, having secured funding through a Government Guarantee loan of US$121.65 million, which was approved by the House of Representatives on Wednesday (Sept. 16).
The loan, granted under the provisions of the Approved Organisations and Authorities Loans (Government Guarantee) Act, was made available through the HSBC Bank in London, and supported by Eksport Kredit Fonden (EKF). The EKF is the Export Credit Agency of the Danish firm, E Pihl and Sons, which is to be contracted to undertake the construction of the terminal on behalf of Royal Caribbean Cruise Lines (RCCL).
Minister of Finance and the Public Service, Hon. Audley Shaw, who moved the motion for the granting of the loan in the Lower House, said that when the Falmouth Cruise Ship Terminal is completed, it will be able to accommodate RCCL and Genesis class of vessels, which represent the largest cruise ships in the world. “Currently, there is no existing port facility in that region that has the capacity to accommodate a vessel of this class,” he pointed out.
The Port Authority of Jamaica, the implementing agency, will be in charge of the marine works, which encompasses the development of the berths, and the terminal areas and building.
RCCL, which has also invested US$102 million in the project, will be responsible for the land development, which entails the construction of shops, restaurants, landscaping, and beautification of the facility.
The Minister informed the House that 180,000 square feet of shopping space will be made available and already, RCCL has received applications for 200 shops from the private sector.
In terms of the viability of the project, the Minister informed that the berth facilities will have the capacity to house two ships at one time – a giant ship and a smaller one. He said that projections in relation to revenue are based on a guarantee of arrival of a minimum of 800,000 passengers to the port per year.
“It is on the basis of the per passenger fees that will be collected at that port, that the loan will be serviced out of those fees,” the Minister Shaw noted.
He informed that for years one to three, there will be a US$19 per passenger charge; years four to six, a US$17 fee; years seven to eight, US$15; and years nine to 10, US$12. The Minister said that these rates will be up for negotiations in year 11, because that would be the end of the 10-year period – the life of the loan.
The Minister also informed that the repayment of the loan, which has an interest rate of 2.25 per cent, and a moratorium on principal payments for six months, will begin after construction is completed.
Turning to employment, the Finance and the Public Service Minister informed that there will be 500 jobs during the construction phase and it is estimated that some 900 direct and permanent jobs will be created.
Member of Parliament for North Trelawny, Dr. Patrick Harris, said this project will “redefine Jamaica’s tourism product,” while Opposition Spokesman on Transport, Robert Pickersgill, in voicing his support, said that it is a “tribute to visionary planning.”
Member of Parliament for Central Kingston, Ronald Thwaites, in his contribution, suggested that attached to the guarantee request, should be “a set of the financial projections, which would allow Parliament to review this from time to time to ensure that this very good project, which deserves support, isn’t going off the rails.”
Cabinet, in 2007, gave approval for the Port Authority to proceed with the development of the cruise shipping facilities at the Falmouth Harbour, and the participation of the RCCL in the project.
In November 2008, the Cabinet approved the award of a US$122 million contract to RCCL for the harbour works and marine package.

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