Friday, May 14, 2010

New Bahamas Container Shipping Port Gets The Go Ahead

Government Moves to Commence Construction in Nassau
Shipping News Feature

BAHAMAS – In what appears to be a local power struggle Prime Minister Hubert Ingraham has seemingly ensured that his plans to create a new container port facility at Arawak Cay will come to fruition by setting terms for the new construction that will make it extremely difficult for opponents to cancel the scheme at any point in the foreseeable future.

The new construction, scheduled for completion by the end of June next year, is planned to have a capacity of 75,000 TEU with the Government levying a rental of $2 million per annum or $40 per TEU, whichever the greater.

The ruling party boss has signed a Memorandum of Understanding (MoU) between the Government and the new port management company APD Limited after witnessing the first ceremonial pile driving at the Nassau site this week. Opponents say the agreement gives the new company a monopoly on shipping freight cargoes to and from the Island containing, as it does, clauses to forbid further port development on, or within twenty miles of, New Providence Island for the next twenty years capable of handling “containerised, bulk or break bulk cargo or vehicles or any other terminal,” although it seems existing facilities will be allowed to continue handling duty paid cargo.

Other benefits to the new operations nineteen shareholders include tax free importation on all materials brought in to facilitate construction of the $65 million terminal, an initial lease of 45 years plus an extension of a further 45 years, the ability to set their own tariffs for receiving, handling and delivery plus storage charges and an assurance from the Government they will compensate all shareholders should they decide to relocate the port within the allotted time span.

Some shareholders have cast doubts on their willingness to invest as the Government has a veto on Chairman of the company plus a host of safety net regulations stipulating the modus operandi of the new company whose shares are to be divided between the Government itself (40%), the institutional shareholders, said to be basically shipping interest groups, (40%) and private investors holding the balance. The new company appears to be currently headed by James Mosko, a well known local property developer with no known shipping interests,but as yet it does not seem to have a website having traded previously under the name Arawak Cay Container Port Development Company.

The Government foresee opposition from various quarters including the Progressive Liberal Party (PLP) who proposed an alternative scheme and what the PM has referred to as “a select few families” who he says have dominated the Nassau port scene for too long.