What justified a new port?

Several pieces have been published by this writer, dealing with the new port that is being constructed in Kingstown. In this piece from nearly two years ago, we interrogated the justification for its construction.

Considering recent developments where we saw a breach in the perimeter of the ground surface area at the construction site, causing base material to escape back into the bay, we wish to revisit some of what was presented in our previous piece. These developments seemingly will not only threaten the completion timeline, but also the overall cost of the project. Time is money. We’re told now that the expected completion date has been pushed to August 2025.  

Let’s summarily revisit what we presented in 2023 and give you a modified version. We stated that SVG became a net importer of food during the period 2000-2004.

In 2019, the idea of this new port project was initiated with studies and requests for funding from the Caribbean Development Bank. In that same year (2019), SVG exported a total of EC$108.9 million. In fact, this was listed as a decrease over 2018; meaning that we exported less in 2019 than we did in 2018.

For the years 2015-2019, SVG experienced an average negative trade balance of over EC$793 million. This is how much more it imported over what it exported. That is to say: in the same year when we decided to initiate the project, we were importing — on average — EC $793 million more than we were exporting.

Who said to build a new port? We told you that in 2008, the government of SVG borrowed US$431,000 from the CDB to pay for a port rationalisation study. This study, which apparently resulted in the decision to build new, was reportedly done by Mott Macdonald, in association with Sorrel Consulting Limited. Essentially, the government commissioned a study, which supposedly concluded in 2019 with the consultants saying to build new. 

Like the feasibility study of a new port that was supposedly done in 2017, we’re not clear if this rationalisation study has ever been made public, and whether a new port was the only recommendation by the consultants. Nonetheless, we’re told by the government that this study resulted in the decision for a new port in Rose Place (Bottom Town).  

While the government was conducting its study, the CDB conducted its own study in 2016 of 12 ports within the region. For SVG, it basically concluded that the existing port could be upgraded at a cost of no more than US$20 million, depending on the work done.

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 modernizes 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 modernized 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.”

Here it is that the CDB was saying that if the existing port was upgraded (costing less than US $20 million), it would be able to handle the increased activity that it had forecast through 2025. However, now that we’re in 2025, are we seeing any increase in container movements anywhere? If we are not, it stands to reason that upgrading the existing port could have sufficed way past 2025, and there was no immediate need to build a new port for EC$600 million.

After the government submitted its application materials to the bank for funding the port, the CDB published a 2019 appraisal report that 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 own 2016 port study report, was more in line with Option B, which would have cost US$10-20 million; but by now we all know that Option C was the choice of the government. Read more in the previous piece about the reasons given by the government for going with Option C.

Again, considering the current issues surrounding the port construction, the CDB appraisal report for the project did state: “An SEP [Stakeholder Engagement Plan] inclusive of a GRM [Grievance Redress Mechanism] was developed to support participation and to keep all affected or with a stake/interest in the Project informed. SEP will provide opportunities for affected communities or parties to register project-related concerns and facilitate the timely resolution of any issues that may arise during project implementation.”

Perhaps this is a mechanism that can be used to seek answers about the current state of the project.

Observer

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