THE Port of Port of Spain is not profitable.
And it hasn’t been for a long time.
To stay afloat, its time to reposition it.
Nestled along the coast of the country’s capital, the port’s future is to dispense with being a public entity and explore private sector partnerships.
In an interview with the Sunday Express, its chairman Lyle Alexander explained that the port is one of the few in the region that has zero private sector involvement.
That’s about to change.
In his 2020 budget, Finance Minister Colm Imbert said that in the next fiscal year, the Ministry of Works of Transport will be mandated to take immediate steps to rationalise the operations of the Port Authority of Trinidad and Tobago, and to introduce a private sector operator into the port’s handling operations.
For Alexander, the budget announcement was not unexpected, as the port has been reviewing options to bring private sector involvement for the past two years.
“It’s something we have spoken about. We need to explore the full commercial potential of the port,” he said.
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 development better infrastructure and operational efficiencies, the port lagged behind in upgrading its equipment.
“We have not kept pace with changes ensuring we are adequately resourced and to a certain standard,” he acknowledged.
The port, he said, has an efficiency issue.
“Well, it is efficient based on what we have—our technology and our equipment. But we ought to be more efficient. We need to compete in the region,” said Alexander.
In 2019, 180,000 containers passed through it.
In 2020, the year of a global pandemic, only 112,000 have passed through so far.
The port’s potential
The port’s selling point, is its location, said Alexander.
Geographically, the port is located in a natural, sheltered harbour that has a surplus of space.
“Its a great transshipment point,” he said.
To complement that, said Alexander, is its skilled workforce and low tariffs.
But it hasn’t been able to exploit these advantages, he said.
At one point, the Government had considered moving the port to Sea Lots, but the Sunday Express understands it wasn’t financially feasible.
There are factors which inhibit its competitiveness.
Among them are:
1. Its marine infrastructure: its limited capacity means its unable to accommodate larger size vessels;
2. Equipment superstructure: technical obsolescence of ship-to-shore (STS) and rubber-tyred gantry (RTG) cranes;
3. Terminal storage areas: congestion during peak periods;
4. Integrated ICT systems: underutilisation of information systems.
Alexander explained that dredging is big area of concern for the future functioning and profitability of the port.
He said the last dredging, done last year, cost US$60 million. That’s US$70 per cubic metre of dirt.
He said about 70,000 cubic metres of soil were moved.
He said to cater for larger vessels, the port will have to be dredged, which will be a significant cost.
As for port workers, Alexander explained that for now, the port was being operated by people.
“Whatever arrangement comes into place, people will have to work and it will be from the pool of resources working now,” he said.
President of the Seamen and Waterfront Workers’ Trade Union (SWWTU) Michael Annisette has said the union will work with the Government and whichever private company gains control of the Port of Port of Spain.
Following Imbert’s October 5 announcement, Annisette said the Government had starved the port of cash and resources.
“The issue is if you don’t update your infrastructure, your equipment, if you are not adaptable to the growing needs of your customers, which is the shipping line, then we will find ourselves in the position that we have found ourselves in Trinidad and Tobago, unfortunately,” he had said.
Alexander said the privatisation of the port was key to the economic survival of T&T.
“The port is the gateway for doing business in T&T. It is critical to the contribution of the economic development of the country. We need new investment which we do not have at the moment,” he said.
Some of the advantages of private sector operations for the port would be access to private capital and more access to markets.
The port he said will benefit from capturing increased transshipment traffic, improved port performance for transshipment and domestic goods; and improved land utilisation and increased competitiveness.
For Alexander, the goal is to be operationally efficient, Institutionally optimised, with sufficient cargo handling capacity and future expansion.
What Colm said about the ports
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 Ltd 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.
—Finance Minister Colm Imbert, Budget 2021