Govt to choose a port partner in 2023 | Local Business

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WORKS and Transport Minister Rohan Sinanan said yesterday that come August, the Request for Proposals (RFP) seeking a private investor for the Port Authority of Trinidad and Tobago (PATT) will be issued.

It has been 20 months since the Government signalled its intention to seek a private investor for PATT via a Public Private Partnership (PPP) agreement.

Sinanan dismissed the suggestion that it’s taken a long time for the issue to be completed, explaining that it was a major step forward and as such, was not something that could be rushed.

He said that Washington DC-based Inter-American Development Bank (IDB) has been engaged to provide technical assistance to the Government, which includes assessing the project readiness and developing the necessary activities that are required for the successful implementation of the project.

“Right now, we are formalising the RFP, which should be out by August,” he said.

He expects that the RFP will be out for about three months with an operator being installed by 2023.

In the search for a private sector partner for the Port Authority, the project has undergone several stages.

In August 2021, the PATT invited Expressions of Interest (EOI) from investors for the private sector involvement.

According to the Authority, the EOI was designed to encourage and create the competitive environment for the creation of new business opportunities and revenue streams for the Port Authority and the potential partner.

The EOI targeted investors with experience in port investments, development and operations, shipping, logistics and cruise operations.

The potential investors were invited to propose business ideas that will support participation in a Public Private Landlord model project with the Port Authority in the areas of cargo operations at the PATT, the cargo and cruise operations at the Port of Scarborough, regional cargo activities at the Caricom wharves and the cruise shipping operations of the Port Authority.

In the notice, the Port Authority said it recognises that an effective PPP agreement has the potential to not only generate revenue but also positively enhance the experience of port users, businesses and the national community.

The EOI closed on November 23, 2021.

Sinanan said that the EOI was to determine the market appetite for the project.

In addition to the EOI, the PATT issued a short-term RFP for the procurement of advisory services to the Port Authority for the PPP project from the period November 01, 2021 to December 17, 2021.

Sinanan said the RFP for a partner is the final phase in the completion of the exercise, which is being done under the guidance of an inter-ministerial committee.

He said the committee has to decide on a model that would be appropriate for the Government to use in getting a partner for the Port Authority.

“We ended up having more questions than answers during the process. But we have been going through the process carefully and thoroughly for a project of this magnitude,” he said.

“We are hoping to have this fully completed by 2023,” he said.

With regard to workers at the port and their concern about job losses in the process, Sinanan said that right now the union was in negotiations with the Chief Personnel Officer (CPO) and he did not want to say much about it.

“Those questions will come after we have completed this process,” he said.

The PPP initiative seeks to rationalise the operations of the PATT and to introduce a private sector operator into the Port handling operations. The approach is intended to improve the competitiveness and efficiency of the operations of the Port.

Project inception

The issue of the Government looking for a private partner for the PATT was first raised by Finance Minister Colm Imbert, in delivering the 2021 budget presentation on October 5, 2020.

Imbert said then the Government was seeking private sector support for the economy.

“In particular Madam Speaker, the private sector has become increasingly and successfully involved in the operations of cargo-handling operations at port facilities worldwide. Public port agencies have been moving away from the service port model under which national port authorities provide all commercial services as well as regulatory functions; but increasingly have been utilising the landlord model. The Government has decided to adopt this approach with the Port Authority retaining its regulatory and asset management functions, but with managerial, operational and financial responsibility for commercial activities such as terminals and equipment in the port area under a new investor.

“The Ministry of Works and Transport will therefore be mandated to take immediate steps to rationalise by the end of fiscal 2021, the operations of the Port Authority of Trinidad and Tobago and to introduce a private sector operator into the Port handling operations now carried out by the Port of Port of Spain, leaving the ferry service to the Trinidad and Tobago Inter-Island Company Limited and the lands for the Port of Spain Infrastructure Company. We will also take steps to ensure that the operations at Point Lisas Industrial Port Development Corporation are consistent with the operations of the port handling operations of the Port of Port of Spain,” he had said,

The Cabinet subsequently appointed a committee chaired by Public Administration Minister, Allyson West, which produced a report on the port’s potential.

Based on that report, which was submitted to Cabinet, the port was mandated to go out with an EOI.

In an interview with the Express last year, port chairman Lyle Alexander said that the port’s operations could be more efficient and lamented that the port has not been profitable.

Alexander had said the Port is one of the few in the region that has zero private sector involvement.

The fact that it has remained a public entity for the past 100 years, he said, hasn’t worked for it financially.

In fact, being public and depending on allocations from the Public Sector Investment Programme (PSIP) has been a disadvantage.

While ports throughout the region were able to develop better infrastructure and operational efficiencies, PATT lagged behind in upgrading its equipment.

Jamaica ahead

In April 2015, the Port Authority of Jamaica (PAJ) signed a US$510 million deal with French-owned company Terminal Link/CMA CGM Consortium, for the privatisation of the Kingston Container Terminal (KCT).

Speaking at the signing ceremony, Jamaica’s Prime Minister at the time, Portia Simpson-Miller, said the agreement paved the way for the dredging and expansion of KCT in two phases, which included the dredging of the ship channel, turning basin and some berths to accommodate the mega ships expected to arrive after the expansion of the Panama canal.

The privatisation of the facility and dredging of the harbour, which were key aspects of a 30-year concession agreement, were part of Jamaica’s plan to position the island to become the fourth node in the global logistics chain, and take advantage of increased maritime activity, consequent on the opening of the expanded Panama canal, according to a Jamaica Information Service report in April 2015.

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