Many have been asking the question: why exactly does SVG need a new port? What is the justification? Where is the feasibility study?
During the period of 2000-2004, SVG became a net importer of food. This means that it imports more food than it exports. In 2019, when certain aspects of the project were initiated (studies done and published; request for funding), 23.5% of SVG’s import bill was attributed to the category — the largest — of “food and live animals”. That was an amount of over EC$212 million, an increase of 1.5% over 2018. Of the EC$212 million, meat accounted for over EC $50 million; dairy products, over EC$21 million; fish, including crustaceans, over EC$6.3 million; cereal, over EC$55 million; fruits and vegetables, over EC$22 million; sugar, over EC$10 million. Other food products accounted for over EC$36 million. In a separate category, beverages accounted for over EC$30 million. All of this is according to government figures.
In the same year – 2019 – total exports (all categories) amounted to EC$108.9 million, a decrease of 10.8% over 2018. Of this amount, the category of “food and live animals” amounted to just over EC$65.4 million — a 3.1% increase over 2018.
Between 2015 and 2019, SVG experienced an average negative trade balance of over EC$793 million. This is how much more it imported over what it exported.
Perhaps this is part of the justification for the new port, but let’s look at what the Caribbean Development Bank (CDB) is listing as the rationale it received in the application for funding.
Before we do so, you must know that in 2008, the government of SVG borrowed US$431,000 from the CDB to pay for a port rationalisation study. This study was apparently done by Mott Mc Donald, in association with Sorrel Consulting Limited. The actual study began on Jan. 18, 2010, and apparently spanned several years. The 2015 Budget Address states this: “The scope of the SVG Port Rationalisation Study (Phase I) by the consultancy firm Mott Mc Donald of the United Kingdom, is being extended. The Consultants had earlier concluded, after careful study, that a new, modern seaport facility was required to meet our country’s needs immediately and in the foreseeable future. They had recommended that the relocation of the seaport to the western end of Kingstown (towards Rose Place) was the best option of the sites between Kingstown and Campden Park. Upon a diligent review of the Study, the CDB concluded with the SVG Port Authority that the scope of the Study ought to be modified and extended.”
Like the feasibility study that was supposedly done in 2017, we’re not clear if this rationalisation study had been made public, and whether a new port was the only recommendation, but it was extended at this time in 2015, to include a possible site in Arnos Vale, as well as to include the Grenadines in the study.
Enter 2016, where the CDB conducted its own study of 12 ports within the region. For SVG, it listed and recommended several things. To improve efficiency, it addressed three areas of bottleneck and offered recommendations: “Terminal design should be optimized, in accordance with best practices. Additionally, the port entrance road should be improved, in order to reduce congestion. In order to ensure continued operations, the Port of Kingstown requires additional equipment, as the current backup top pick [Container handling equipment; comparable to a reachstacker] is in a dilapidated state, resulting in downtime”. It also states: “An integrated IT system would reduce manual labour (thereby reducing labour costs) and enable more efficient operations.”
For development options, the report stated two: Improve terminal layout and Rehabilitation. For terminal layout, itstates: “The outdated terminal layout limits operational efficiency and throughput capacity. Additional yard space can be achieved through removing the warehouse on the apron area. Dwell time can also be reduced by improving yard management and customs clearance times. Additional layout updates, through land reclamation or operations relocation, would entail substantially higher investments.” This option it says could cost either US$1 million, or US$10-20 million if additional layout updates are included.
For rehabilitation, it states: “Some parts of the pavement in both the Port of Kingstown and CPCP [Campden Park Container Port] have deteriorated and should be rehabilitated to ensure safe operations.” The estimated cost for this would have been US$2.5 to 5 million.
The report also acknowledges the rationalisation study that was done. For that, it says “A Port Rationalization Study has been carried out. The preferred option for the new port development is still uncertain. The investment would allow for concentrated operations.” This option it estimated would have cost — at the time –US$53-100 million. As we stated previously, the Parliament of SVG was told in January of 2015 — Budget Address — that Rose Place was identified as the area for the new port, but here’s the CDB report in 2016 stating the preferred option was still uncertain. Perhaps this is a result of an error in communication, or timing. You must also note that US$100 million was the initial number stated by the government [budget 2017], as the cost of a new port. That number is now US$185 million.
We must also state here that the development options listed by the CDB in its 2016 study, came after it had addressed the forecast activity of the existing port through 2025. It stated specifically this: “Saint Vincent & the Grenadines is projected to experience moderate economic growth, with a GDP growth of approximately 3.0% per annum. Consequently, container throughput is estimated to increase from approximately 17.6 kTEU [20–foot Equivalent Units] in 2015 to approximately 23.5 kTEU in 2025 (CAGR (2015 –2025): 2.94%). It is expected that the port will be able to handle the additional cargo if it modernises the terminal layout (by removing inefficiently placed warehousing) and improves its yard management (cargo dwell times and efficient placement). Additionally, the terminal layout can be substantially modernised by reclaiming land between the yard area and the main cargo berth; however, it is to be noted that this may entail substantial investments. Alternatively, the SVGPA [Port Authority] is currently looking into relocating operations.”
You must also note that several of the 12 regional countries included in the CDB’s study, were also given similar recommendations. Like SVG, St. Kitts, Guyana, Grenada, all shared similar issues with their terminals. St. Kitts, Grenada, Suriname, all shared similar issues with integrated IT systems. Guyana and Trinidad had similar issues with equipment.
CDB’s 2019 funding appraisal report had this to say about the rationale for a new port in SVG: “In the Masterplan, five development options for the port were formulated and evaluated for selection as follows.
(a) Option A1- “Do Minimum”: Maintain break-bulk operations at Kingstown and container operations at CPCP.
(b) Option A2 “Do Minimum”: Shift break-bulk operations to CPCP and return container operations to Kingstown.
(c) Option B: Redevelopment and expansion of the existing port at Kingstown.
(d) Option C: Relocation of the commercial port and ferry terminal to a new location within the Kingstown precinct; and
(e) Option C2: Inclusion of the Arnos Vale site.”
What the CDB recommended in its 2016 port study report, was more in line with Option B, but by now we all know that Option C was the choice of the government.
Among the justification and rationale presented in CDB’s appraisal report are some that we’ve already discussed above (congestion, aging infrastructure at the current port, limited equipment, lack of integrated IT systems, space constraint between the cruise ship terminal and the grenadines terminal, etc.). Regarding the space constraint, the suggestion is that if Kingstown were to become a home port for cruise ships, there won’t be enough space there to process passengers and their luggage as well as border control; and if it must be expanded, it will have to back up into the grenadines ferry terminal. This it says would only be possible through relocation of the ferry terminal. Among other points listed are support for greater climate resilience; “promote poverty reduction and a strong positive social impact, including gender equality”; “support economic growth”; “climate action”; “Good governance”; and improved living conditions for persons affected by the project.
Also listed as an advantage of Option C is this: “Less need for extensive road transfer of containers from CPCP to Kingstown on the narrow Leeward Highway with its dangerous bends.” It is fair for one to wonder if any of the new proposed developments in the Central Leeward area, including the new resort in Buccament, were to frequently import containers of goods what would become of the Leeward Highway. Perhaps they would be transported by sea, down to Buccament or Mt. Wynne.
For further insights and information, readers are encouraged to peruse the documents for themselves, to get a sense of the full thought process and rationale behind the decision to build a new port, at this time. We were told that the port cannot pay for itself. For this reason, and the current economic conditions of the country, we wonder what the results would have been had this been put to a referendum. That is: should the government take the recommendations proposed by the CDB in 2016, or should it spend over EC$500 million on a new port — at this time — that won’t be able to pay for itself, as we’re told? We also wonder if conditions at the ports worsened over the years, due to neglect, like what we saw happened to the schools.
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