ENGAGEMENT WITH THE PRIVATE SECTOR TOWARDS THIS OBJECTIVE

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Report on Caribbean Maritime Port Services Industry

Financing Port Development

Financing Methodologies

Public Private Partnership [PPP] for Development Goals

◦ Definition of PPP

Port Authority of Jamaica’s Experience

◦ Long Term Lease

Falmouth Cruise Terminal

◦ Concession

Kingston Container Terminal

Rational For Concession

The Outcome

Concluding Remarks

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Port Services Industry key sector to economicdevelopment.

Developments in shipping industry – additionalpressure for efficient port sector.

Demands:

◦ Significant capital investment

◦ Improved labour practices

◦ Changes in institutional reporting framework insome countries

Investment in Ports not optional.

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Port Sector - very capital intensive but vital to

economic growth and sustainability.

Investment required substantial.

Concurrently, the revenue flows/ margins are

tight.

Private Sector resources an important source to

tap.

Appropriate financing key to sustained success.

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Port Infrastructure: financed using customary methods ◦ Multilateral funding

◦ Commercial Bank funding

◦ Mix of Multilateral/Commercial Bank

Engagement with the Private Sector [PPP]◦ Can take several forms

Management Contracts

Long term Leases/Concessions

Privatization

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PPP-financing method with additional

benefits

◦ Expertise & Efficiency; lower costs

◦ Secured markets/revenue flows

◦ Risk Sharing

◦ Frees up Government’s resources to support more

basic social needs (education; health; security)

Can be complex, lengthy and sometimes

costly venture.

Select options carefully.

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No universal/legal definition

A public-private partnership (P3) - acontractual arrangement between a publicagency (state or local) and a private sectorentity.

Facilitates the sharing of skills and assets ofeach sector (public and private) in delivery ofa service/facility.

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A long term lease with Royal

Caribbean Cruise Lines (RCCL)

Shared development costs

o PAJ-Pier/Support facilities

o RCCL-Landside

Risks are shared

Common interest in

development asset/location.

Secured market/ revenue

flows

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PRESENT OPERATIONS1972

Over US$510M spent to develop

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KCT: INFRASTRUCTUREDraft: 13.0mQuay Length: 1300mYard Space: 43.87haReefer Plugs: 334

Draft: 12.8mQuay Length: 535mYard Space: 21.63haReefer Plugs: 408

Draft: 12.6mQuay Length: 475mPaved Yard Space: 13.53haReefer Plugs:

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High cost to optimize and expand the KCT and dredge

the navigation channel.

Expansion plans by competitors; investment needed to

maintain and grow business.

Other developments in the International Shipping

Industry.

Fiscal Constraints of PAJ and Government of Jamaica.

Improved operational efficiencies at KCT.

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Preparatory

Work

Landlord

Model

2010

Prequalification

Process

2013

Bidding Process

Identification of

Preferred Bidder/

Commence

Negotiation

2014

Conclude

Negotiation/

Sign

Concession

Agreement

2015 - April 7

Securing

Financing for

Phase 1

Development

2015 April 8

to Present

GE – General Election

2011GE

2016GE

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AREA OF EXPERTISE CONSULTANT

Financial Advisor PricewaterhouseCoopers [PwC]

Legal Consultant Dunn Cox [Ja]/ Mayer Brown [US]

Market Assessment Ocean Shipping Consultants

Technical – Port Optimization & Expansion

AECOM

Environmental [EIA] TEMN

Dredging designs Mott MacDonald

Civil Works SMADA Consultant

Guided by Best Practice:

◦ Government’s Public Private Partnership Guideline & Policy Framework & World Bank/PPIAF Template

◦ Internal Experts used extensively

◦ Cabinet Approvals at key stages of the Process

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OBJECTIVES OUTCOME FOR PAJ OUTCOME FORCONCESSIONAIRE

GTO to operate a

Concessionaire to undertake Capital Dredging

a

Global Transhipment Hub/Multi User Port

a a

Expansion based on Market events – Panama Canal

a a

Contractualize net flows fromKCT with uplift potential

a

Acceptable Return on Equity a

Central Location in Region to consolidate and expand business

a

Well established business with good cash flows

a

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Maritime Port Services Industry – key to sustainedeconomic development.

Very capital intensive and very competitive.

Engagement with Private Sector an efficient way ofachieving development.

Such engagement should be tailored to meet thespecific objectives to be achieved.

A Long Term Concession one way of Private Sectorengagement with mutual benefits.

However, usually a lengthy and expensive process.

Choose particular PPP engagement carefully

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