The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Nassau Container Port (NCP) is expecting container throughput volumes to “skyrocket” by an extra 200-300 per week come August/September 2012 as a result of the Baha Mar project, Tribune Business was told yesterday, with its associated Gladstone Freight Terminal set for a July 15 opening.

Michael Maura, chief executive of Arawak Port Development Company (APD), the NCP operator, described the new port facility as being “in good shape’, currently receiving 5,000 inbound 20-foot equipment units (TEUs) and 65,000 tonnes of bulk material per month.

Disclosing that APD had currently invested $70 million of its total $83 million construction budget, Mr Maura said the “next big step” was the opening of the Gladstone Freight Terminal - the location where containers containing cargo belonging to more than one Bahamian importer would be ‘broken down’ into their respective assignments.

The APD chief executive said the Gladstone Freight Terminal was intended to act as a “one stop shop” for the clearance of goods and payment of due Customs duties, and added that the NCP’s single gate in/gate out was boosting both the Government’s revenue collections and aiding the fight against crime.

“We expect, based on what we’re being told, that come August the [cargo] volumes will really take-off, and that will be specific to the Baha Mar project,” Mr Maura told Tribune Business.

“Most of the Baha Mar project to-date has been earthworks, concrete and steel. As a result, all the project-related freight up until this point has been bulk steel and related aggregate.

“What we expect, and what we’re being told, is that come August/September volumes are going to skyrocket by 200-300 containers per week in terms of project cargo.”

Apart from boosting NCPs container throughput volumes, the increased Baha Mar-related cargo may help to drive down the various tariffs and fees charged by Nassau’s newly-constructed shipping port.

NCP’s tariffs, as per the Memorandum of Understanding (MoU) agreed with the former Ingraham administration, are designed to generate a minimum annual 10 per cent Internal Rate of Return (IRR) from its shareholders.

However, the company’s initial container throughput projections were deliberately conservative, and did not include a potential traffic increase due to Baha Mar. As a result, if volumes do increase, there is the potential for NCP to actually reduce some tariff rates and still hit the minimum IRR target.

Any tariff reduction would be good news for Bahamian importers and consumers, helping to counterbalance the inflation and cost of living increases stemming largely from previous high global oil prices.

All vessels and freight destined for New Providence have been coming through the NCP since April 15 this year, and Mr Maura told Tribune Business: “Our next big step, due to happen on July 15, is the opening of the Gladstone Freight Terminal.

“From an APD perspective, we’ve done all we need to do in terms of construction for that building. We’ve been waiting for the tenants to complete the outfitting of their office space, and that will be completed this week.”

The Gladstone Freight Terminal’s tenants had asked for “a week’s grace” before the formal opening, Mr Maura said.

He identified them as Tropical Shipping, which had leased Bays 1, 2 and 3; Atlantic-Caribbean Line, which has taken a single bay; and Gladstone Warehouse Services. The latter is affiliated with Arawak Stevedoring, and will provide ‘break bulk’ services to Crowley, G & G and Mediterranean Shipping Company (MSC).

While full container loads will remain at NCP’s Arawak Cay facilities until their importers pay the required Customs duties and pick them up, Mr Maura said those TEUs containing goods belonging to more than one importer would be taken to the Gladstone Freight Terminal.

There, these containers would be ‘broken down’ and product allocated to its rightful owner, with all cargo unloaded in what is effectively a bonded warehouse.

“We’ve completed construction of the administration facility at the Gladstone Freight Terminal,” Mr Maura told Tribune Business. “Customs has completed their IT work out there, so all importers will be able to pay duty. It’ll be a one-stop shop.”

As for APD’s construction progress at NCP, Mr Maura added: “We are through about $70 million. We still have to complete the administrative facility here at the NCP, and we have the BEC substation we have to complete.”

The NCP is currently using the pre-existing utilities infrastructure at Arawak Cay, but Mr Maura said it was supposed to “pick up the expense” of a new electricity sub-station.

The Government had wanted to upgrade the area’s power infrastructure, he explained, given that it had viewed the NCP as “a launching pad” for numerous business spin-offs in the Arawak Cay area, plus a potential expansion of the Fish Fry.

On the container terminal side, Mr Maura said NCP was handling “in the neighbourhood” of 5,000 inbound containers per month. With the same number also heading out of New Providence, it was handling a monthly total of 10,000, with 20 vessels calling per week.

“On the bulk side, there’s in the neighbourhood of 65,000 tonnes of bulk material being handled at the bulk terminal at the NCP. We’re in good shape,” the APD chief told this newspaper.

APD currently employs 103 persons, and Mr Maura said all the shipping companies using its facilities “would definitely have seen efficiencies” since they started operating from its facilities.

Much of this, he explained, related to the increased space they had at Arawak Cay. In their previous, more cramped Bay Street facilities, shipping companies were having to pick-up containers numerous times and move them around before they left the dock. At Arawak Cay, Mr Maura said these containers were only moved “one time” - from the vessel, to the stack and then to the chassis - before the exited the gate.

“It’s a very efficient operation,” he emphasised. ‘With the money we’ve invested in IT infrastructure, fate infrastructure, Bahamas Customs, there’s only one way in, one way out.

“Every container coming in on a ship is landed here, and Customs watches it go out through a single gate and return through a single gate.

“We have really introduced substantial controls with Customs. This battle we’re having as a country with crime, having that control of imported cargo is a big step in helping the Government fight crime.”

APD, Mr Maura added, was meeting weekly with Customs to ensure there were “no surprises”, and the Public Treasury was benefiting from this.

“Moving this port has taken a huge step away from manual processes, paper, to more of an IT, e-commerce operation,” the APD chief executive added.

Pointing out that he had never denied that the NCP’s creation would result in an increase in fees, Mr Maura said an average rise of between 1-1.5 per cent could directly be attributed to the port, and it was “never to the extent or degree” that some had alleged.

He added that much of the increases experienced by Bahamian importers had more to do with rate levels assessed against them by their shipping carriers, rather than the NCP. And many shipping companies had not passed any fee increases on to their customers.

Mr Maura told Tribune Business that any time an importer complained about delays at the NCP, they were invited to the facility to discuss their concerns and see the operation in action.

He added that he had spoken to Rupert Roberts, Super Value’s owner and president, on several occasions, and the supermarket chain’s team had been “very impressed” once they witnessed the Port’s operations first-hand.

Emphasising that NCP management were “very serious” about ensuring domestic importers did not suffer once Baha Mar’s volumes picked up, Mr Maura said of progress to-date: “This was not a greenfield site. It was an existing port operation.

‘We had to construct a port around existing operations, and also had essential government infrastructure here in the shape of the water reservoirs. Those were supposed to be moved in July 2011, but did not move until December 2011.

‘That was a six-month delay right there. We have had a few delays which have extended this operation, but I’m not complaining. We’re in good shape.”