Beverley Williamson, Senior Vice President, Business Management and Special Projects, Port Authority of Jamaica discusses the role of PPP financing during Caribbean Development Bank's seminar on 'Towards Greater Efficiency: The Transformation of the Caribbean Maritime Port Services Industry' at its 46th Annual Meeting in Kingston, Jamaica on May 19, 2016.

1. ENGAGEMENT WITH THE PRIVATE SECTOR
TOWARDS THIS OBJECTIVE
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2.  Report on Caribbean Maritime Port Services Industry
 Financing Port Development
 Financing Methodologies
 Public Private Partnership [PPP] for Development Goals
◦ Definition of PPP
 Port Authority of Jamaica’s Experience
◦ Long Term Lease
 Falmouth Cruise Terminal
◦ Concession
 Kingston Container Terminal
 Rational For Concession
 The Outcome
 Concluding Remarks
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3.  Port Services Industry key sector to economic
development.
 Developments in shipping industry – additional
pressure for efficient port sector.
 Demands:
◦ Significant capital investment
◦ Improved labour practices
◦ Changes in institutional reporting framework in
some countries
 Investment in Ports not optional.
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4.  Port Sector - very capital intensive but vital to
economic growth and sustainability.
 Investment required substantial.
 Concurrently, the revenue flows/ margins are
tight.
 Private Sector resources an important source to
tap.
 Appropriate financing key to sustained success.
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5.  Port Infrastructure: financed using
customary methods
◦ Multilateral funding
◦ Commercial Bank funding
◦ Mix of Multilateral/Commercial Bank
 Engagement with the Private Sector [PPP]
◦ Can take several forms
 Management Contracts
 Long term Leases/Concessions
 Privatization
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6.  PPP-financing method with additional
benefits
◦ Expertise & Efficiency; lower costs
◦ Secured markets/revenue flows
◦ Risk Sharing
◦ Frees up Government’s resources to support more
basic social needs (education; health; security)
 Can be complex, lengthy and sometimes
costly venture.
 Select options carefully.
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7.  No universal/legal definition
 A public-private partnership (P3) - a
contractual arrangement between a public
agency (state or local) and a private sector
entity.
 Facilitates the sharing of skills and assets of
each sector (public and private) in delivery of
a service/facility.
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8.  A long term lease with Royal
Caribbean Cruise Lines (RCCL)
 Shared development costs
o PAJ-Pier/Support facilities
o RCCL-Landside
 Risks are shared
 Common interest in
development asset/location.
 Secured market/ revenue
flows
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9. PRESENT OPERATIONS1972
Over US$510M spent to develop
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10. KCT: INFRASTRUCTURE
Draft: 13.0m
Quay Length:
1300m
Yard Space: 43.87ha
Reefer Plugs: 334
Draft: 12.8m
Quay Length: 535m
Yard Space:
21.63ha
Reefer Plugs: 408
Draft: 12.6m
Quay Length: 475m
Paved Yard Space:
13.53ha
Reefer Plugs:
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11.  High cost to optimize and expand the KCT and dredge
the navigation channel.
 Expansion plans by competitors; investment needed to
maintain and grow business.
 Other developments in the International Shipping
Industry.
 Fiscal Constraints of PAJ and Government of Jamaica.
 Improved operational efficiencies at KCT.
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12. Preparatory
Work
Landlord
Model
2010
Prequalification
Process
2013
Bidding Process
Identification of
Preferred Bidder/
Commence
Negotiation
2014
Conclude
Negotiation/
Sign
Concession
Agreement
2015 - April 7
Securing
Financing for
Phase 1
Development
2015 April 8
to Present
GE – General Election
2
0
1
1
G
E
2
0
1
6
G
E
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13. AREA OF EXPERTISE CONSULTANT
Financial Advisor PricewaterhouseCoopers [PwC]
Legal Consultant Dunn Cox [Ja]/ Mayer Brown [US]
Market Assessment Ocean Shipping Consultants
Technical – Port Optimization &
Expansion
AECOM
Environmental [EIA] TEMN
Dredging designs Mott MacDonald
Civil Works SMADA Consultant
Guided by Best Practice:
◦ Government’s Public Private Partnership Guideline & Policy
Framework & World Bank/PPIAF Template
◦ Internal Experts used extensively
◦ Cabinet Approvals at key stages of the Process
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14. OBJECTIVES OUTCOME FOR PAJ OUTCOME FOR
CONCESSIONAIRE
GTO to operate a
Concessionaire to undertake
Capital Dredging
a
Global Transhipment Hub/Multi
User Port
a a
Expansion based on Market
events – Panama Canal
a a
Contractualize net flows from
KCT with uplift potential
a
Acceptable Return on Equity a
Central Location in Region to
consolidate and expand business
a
Well established business with
good cash flows
a
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15.  Maritime Port Services Industry – key to sustained
economic development.
 Very capital intensive and very competitive.
 Engagement with Private Sector an efficient way of
achieving development.
 Such engagement should be tailored to meet the
specific objectives to be achieved.
 A Long Term Concession one way of Private Sector
engagement with mutual benefits.
 However, usually a lengthy and expensive process.
 Choose particular PPP engagement carefully
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