The Tribune

• $110m in ‘upland’ works starting in earnest

• Top executive: ‘Marine works 90% finished’

• Many tenants to move in by 2022’s end

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The completion of Nassau Cruise Port’s $300m transformation has been pushed back to early 2023, its top executive has revealed, with $110m worth of landside and buildings construction now set to move into high gear.

Michael Maura told Tribune Business that the initial April/May 2022 completion target has been moved to the 2023 first/second quarter due to COVID-related delays, with the Junkanoo Museum, amphitheatre and “two signature food and beverage experiences” at Prince George Wharf’s western end among the last amenities to be finished.

Speaking in a recent interview, the Nassau Cruise Port chief executive said: “Our project is continuing. We have completed about 90 percent of our marine works and materially began our upland works in October 2021. We’ve got the walls up for the arrivals terminal; you can see the skeleton appearing in front of you from the upland works, and this iconic-looking arrivals terminal we’ve talked so much about.

“We’ve got about $110m in upland construction. The monies referred to in Global Ports Holding’s release are speaking to ongoing capital investment in the marine works, and also capital investment in the upland construction. We’re fully funded; fully financed with debt and equity.”

Global Ports Holding, the Nassau Cruise Port’s 49 percent controlling shareholder, in a recent trading update  trading update revealed that the Bahamian project accounted for $79.5m, or almost all its total $83.6m in capital expenditure, during the nine months to end-December 2021. Additional debt taken on to finance the construction work at Prince George Wharf result in Global Port Holdings’ net debt jumping $132.7m during the period.

“Net cash from operating activities was a negative $11.8m in the period, mainly driven by advance contractor payments for capital expenditure in Nassau,” Global Ports Holding said. “Net cash from financing activities was a negative $98.5m, reflecting the net impact of our early Eurobond repayment, drawdown on our new loan facility and an additional $55m of debt issuance by Nassau Cruise Port, as well as $43.1m of interest paid in the period.

“Interest cash payments during the period were notably higher because the first interest payment date on the May 2020 bond issued by Nassau Cruise Port (current outstanding amount of $134.4m) was June 2021. All future interest at Nassau Cruise Port is to be paid semi-annually.”

Mr Maura, meanwhile, revealed that the construction completion deadlines had been adjusted from their original late 2022 first quarter/2022 second quarter goals. “That’s what we had hoped for back in 2019, but where we are today in terms of our arrivals terminal, which will be the new home for Nassau Cruise Port’s team, Immigration, Customs and the Port Department, personnel are expected to begin moving into that facility by December this year.

“Notwithstanding that there will be any finishing work going on, we anticipate moving into that building in December this year. We have the marketplace, which is the new home for the Ministry of Tourism’s legacy tenants, and we expect to allow them to begin to move in and outfit their spaces in November 2022.

“Then, when we move a little to the west, we have what we call the Port Square, which will be authentically Bahamian retail and food and beverage spaces. It will be November 2022 when those tenants have access to those spaces and begin to fit them out,” Mr Maura continued.

“By year-end we will have completed the ground transportation area, which will accommodate taxis and tour operators. It will bring greater efficiency and safety, bringing a more satisfying experience for taxis and tour operators and, more importantly, the customer being the cruise passenger. That facility will be ready by December this year.”

While remaining aspects of the landside/building works will linger into 2023, Mr Maura said: “Two signature food and beverage experiences in the west are scheduled for the first quarter/second quarter 2023 because they are far more elaborate in their design and outline.”

Declining to identify the likely tenants until a lease deal is signed, he added: “We are diligently and continually working with parties interested in those spaces. The amphitheatre will be the 2023 first quarter as well, and the Junkanoo Museum by December 2022/January 2023.”

Nassau Cruise Port’s main contractor, Enka, held a recruitment drive with the Department of Labour on Saturday in a bid to find some 250 Bahamian construction workers to work on the landside element. Prince George Wharf’s transformation comes amid expectations that it will coincide with the cruise industry’s return to pre-pandemic passenger volumes.

“The cruise industry currently expects activity levels to continue to rise, with the industry expecting to reach close to 100 percent fleet deployment during the summer of 2022,” Global Ports Holding said, outlining trends that will also benefit The Bahamas. “As activity levels continue to increase, cruise ship occupancy levels will be crucial to our financial performance.

“Occupancy levels remain significantly below long-established historical norms of over 100 percent, and have not materially risen in recent months. In the last few months, concerns around the Omicron variant had a negative impact on cruise ship occupancy levels, with passenger volumes for January and February 59 percent below the same period in 2019.

“However, occupancy levels are expected to steadily increase over the next 12 months, trending back towards a run rate of around 100 percent by the end of calendar year 2022.” Much is likely to depend on whether another worldwide COVID outbreak occurs, impacting key passenger source markets, rising fuel prices and geopolitical tensions surrounding Russia’s invasion of Ukraine.

However, Global Ports Holding was equally optimistic on the cruise industry’s longer-term outlook. “Longer-term, the outlook for the cruise industry continues to be positive,” it said. “The passenger capacity of the industry is forecast to grow by 45 percent by 2027 from 2019 levels, driven by the 75 cruise ships currently in the cruise ship order book and due for delivery by 2027.

“This growth in the number of ships, and the size of ships, means that many cruise ports will need to invest in their infrastructure in order to be able to accommodate the new ships. There is no better example of this type of investment than Global Ports Holding’s significant investments into Antigua Cruise Port and Nassau Cruise Port.”