US$510 Million Privatisation Agreement Signed For KCT

The Port Authority of Jamaica (PAJ) has inked a US$510 million deal with French-owned company Terminal Link/CMA CGM Consortium, for the privatisation of the Kingston Container Terminal (KCT).

The 30-year concession agreement was signed at Jamaica House, today (April 7), by Minister of Transport, Works and Housing, Dr. the Hon. Omar Davies; President, Terminal Link and Executive Officer, CMA CGM, Farid Salem; and President and Chief Executive Officer, PAJ, Professor Gordon Shirley.

Prime Minister, the Most Hon. Portia Simpson Miller, who spoke at the ceremony, said the agreement is another example of the significant growth in foreign direct investments (FDIs) in Jamaica over the last three years.

She informed that the agreement paves the way for the dredging and expansion of KCT in two phases, which will include dredging of the ship channel, turning basin and some berths to accommodate the mega ships expected to arrive after the expansion of the Panama canal.

Mrs. Simpson Miller said the divestment is a major development which will have significant benefits for the country’s growth and is an important component for the Government’s Logistics Hub initiative.

The Prime Minister explained that greater private involvement by way of investments in the expansion of major infrastructure, such as seaports and airports, is a major plank of the Government’s economic growth strategy.

“That strategy is geared toward achieving greater levels of economic growth to produce more high quality jobs and business opportunities,” she said.

The Prime Minister reiterated that Jamaica is open to business as indicated in recent major improvements of the country’s global ranking.

“As Government, we will be continuing our efforts to improve the business climate … so that Jamaica will remain the best place in the Caribbean to do business,” she said.

For his part, Dr. Davies said the decision was taken to privatize the facility as the Government was not in a position to afford the “additional debt of that magnitude” involved for the expansion of the facility.

He said even though the negotiations had been long, the major objectives of the deal had been achieved. “We have a global terminal operator linked with major container shipping lines which are leaders in their field. The Terminal Link portfolio currently consists of interest in 14 terminals and handled over 12 million TEUs in 2014,” the Minister noted.

Dr. Davies pointed out that after the improvement works have been completed, the facility will be able to accommodate post PANAMAX vessels.

The Minister commended the team at the PAJ, members of the enterprise team, members of the public/private unit of the Development Bank of Jamaica, staff at the Ministry, members of the Cabinet, as well as members from Terminal Link/CMA CGM Consortium for their contribution to the process.

Meanwhile, Professor Shirley said most of the current employees will be re-employed and will be exposed to the best technologies and techniques.

He added that the developments will take place in a timeframe which is in keeping with the commencement of a widescale use of the Panama canal, which is expected to be commissioned in the middle of next year.

In his remarks, Mr. Salem said Jamaica was chosen as a place for investment because of its strategic location in the Caribbean and the great potential it has for development.

“We like Jamaica because there is governance in the country, there is security and it is an equitable environment for employees and employers. This is a long term strategy which we salute,” he said.

Privatization of the facility and dredging of the harbour are being pursued as the Government seeks to position Jamaica to become the fourth node in the global logistics chain, and take advantage of increased maritime activity, consequent on the opening of the expanded Panama canal.

The canal is being expanded to accommodate larger ocean-going vessels operating in the Caribbean basin, and deepening of the Kingston Harbour, the seventh largest natural harbour in the world, will enable Jamaica to accommodate these vessels.

Terminal Link Consortium is jointly owned by CMA CGM and China Merchant Marine. CMA/CGM was founded in 1978 and is the world’s third largest container shipping company.