Plan for Nassau Port Move Revealed

by Larry Smith

It may be that the end game to two decades of fruitless efforts to redevelop the city of Nassau is at hand. Then again, it may be that the process will continue until the island's economy and infrastructure finally collapse under their own weight.

A plan to build a new freight port for the island has been put on the table by the Dutch consortium, Ecorys/Lievense. Ecorys focuses on research and policy advice to solve big development issues. Lievense is an engineering firm that specialises in port and reclamation projects around the world.

They were hired last year to assess the financial and technical feasibility of moving Nassau's cargo facilities to the southwest tip of New Providence. Their study was completed in September and a final report was submitted to the government last week.

Half of the $350,000 cost of the study was paid by the government and half by the private sector. And Nassau Tourism Development Board officials are expected to make an oral presentation to cabinet on the report's main points in the near future.

The 154-page report outlines the Bahamian shipping industry for the first time, and concludes that the existing Bay Street terminals will be unable to handle projected ship calls and cargo volumes over the next 30 years no matter how they are reconfigured.

More importantly, keeping the port where it is will frustrate efforts to revitalise the city of Nassau, lead to further softening of cruise tourism, and contribute to ever-increasing traffic congestion in the capital. Meanwhile, the proposed Clifton location can not only accommodate anticipated growth, but is both economically and technically feasible, the report says.

Bahamian Shipping Operations
Cargo and passenger handling operations currently take place at several locations on New Providence. But most are concentrated in the town's historic natural harbour - at Potter's Cay, along Bay Street, at Prince George Wharf and on Arawak Cay.

The cruise port handles 900 ships a year, bringing about 1.9 million passengers. General cargo is offloaded at four privately-owned terminals east of the cruise port - operated by the Betty K Line, Pioneer Shipping, Tropical Shipping and Seaboard Marine.

Tropical - which has a 46 per cent share of the market - and MSC (Mediterranean Shipping Company) also unload containers at the Arawak Cay terminal, which is operated by Arawak Stevedoring Ltd. This terminal, which can take deeper draft ships, has a third of the cargo market. MSC lands containers at Freeport and feeds freight to Nassau via a local operator.

New car imports are handled at Prince George dock. About 6800 vehicles were imported this way in 2006, with another 2,500 cars and trucks imported as deck cargo. Small volumes of general cargo are also handled at Potters Cay, and Out Island settlements have containers shipped directly from Florida or transhipped from Nassau. Inter-island passenger ferries are based at Potters Cay, and there is a small informal trade with Haiti via sailing vessels that anchor off Arawak Cay.

Dry bulk cargoes for construction materials (like cement, steel and aggregates) are handled by Mosko's at Arawak Cay and by Bahamas Cement at Clifton Pier. Some incidental flows are also received near ongoing project sites, such as Atlantis currently. Potable water is shipped from Andros to reservoirs at Arawak Cay, but this is being phased out as the Water & Sewerage Corporation switches to reverse-osmosis production on New Providence.

Oil imports are handled by several companies at Clifton Pier and totalled 4.2 million barrels (mostly gasoline, kerosene and diesel fuel) in 2006 at a cost of some $705 million. Fuel is transported by 50,000 ton tankers making about 38 calls a year. And some 38,000 tons of LPG are imported each year on smaller vessels.

Nassau's container terminals handled 73,000 TEU (twenty-foot equivalent units - a measure of containerized cargo capacity) in 2006 for a volume of 670,000 tons and an average of 1.6 ship calls per day. Non-containerised cargo totalled another 127,000 tons - mostly handled by the Betty K Line. Ninety per cent of container imports are from the United States.

"Since the investment in a seaport has a clear long-term perspective, it was important for the traffic forecast to be carried out in depth," the report says. "Ecorys/Lievense developed a database for container handling from 1995 to 2006 and combined information from terminal operators, government agencies and stakeholders in the tourism industry."

This analysis, together with data from international sources, formed the backbone of the report. Other aspects that were considered in depth included port design, economic feasibility, financial modeling and management options.

Economic Factors
The Bahamian economy is expected to double over the next 30 years, which is the lifetime of the proposed port for the purpose of the Ecorys study. The population of New Providence will also rise to well over 300,000, and per capita income should reach $28,669 by 2035.

Meanwhile, the government is forecasting some $11 billion in foreign investment flows over the next decade or so, a large portion of which will be spent on New Providence by developments like Albany and Baha Mar. All this indicates that container throughput will rise to almost 200,000 TEU by 2025 and to 243,000 TEU by 2035 - more than triple current levels. Container ship size is also expected to increase.

The report estimates that cement imports will grow from 90,000 tons today to 174,000 tons over next 20 years. Car imports will increase to almost 20,000 units a year by 2035, with ship calls rising from 40 to over 100. Fuel imports are projected to rise from 563,000 tons in 2005 to 846,000 tons in 2035, and similar growth is expected for cooking gas imports.

And the Prince George Wharf is already straining to handle current levels of cruise tourism. The Caribbean has a 46 per cent share of the worldwide cruise business, and our share of the Caribbean market is now 35 per cent. But growth has stopped because of the condition of the city and lack of capacity at the cruise port. Not all liners can be accommodated in peak periods, and increasing ship size requires costly harbour modifications.

If the cargo port is relocated and historic Nassau is redeveloped, cruise tourism can expand - with 2148 ship calls a year projected in 2035 compared to 1162 today, and passenger numbers rising from 1.87 to 5.2 million in the same period. Come ashore rates and visitor spending will also improve (these are currently well below average compared to other destinations).

The bottom line is that, even at current levels, freight traffic is disrupting the capital and the container terminals are occupying valuable seafront areas. This not only discourages cruise tourism but restricts options for the town's redevelopment and makes life difficult for everyone. And change will have to come at some point because the existing port facilities cannot handle the projected growth in freight volumes.

Earlier assessments of half a dozen sites around the island - from Arawak Cay to Coral Harbour - narrowed the relocation choice down to an area between the brewery and the power plant at Clifton. According to the consultants, the Mosko dry bulk terminal should move from Arawak Cay to the new port along with all five general cargo operations in Nassau Harbour and the car carriers. Most mailboat operations should remain at Potter's Cay, but inter-island container traffic should also move to the new port.

Port Design
The proposed Clifton port will consist of a new oil terminal platform at a safe distance from other facilities and two new 10,000-ton silos for Mosko and Bahamas Cement. General infrastructure will include an operations centre, Customs office, fire station, gate house, workshop and warehouses, as well as an optional heliport for rescue operations.

Options considered by the consultants included a fully inland port created by excavating a channel and basins, and a coastal port created by reclaiming the sea bed. The recommended solution was for a mix of the two, with an all-weather approach, a breakwater-protected turning basin and inland berths. The cost is estimated at about $235 million.

After reviewing the project's feasibility over a 30-year life span (2015-2044, assuming seven years of construction beginning in 2009), the consultants concluded that the benefits far outweighed the negatives. They include better cargo handling, lower shipping costs, no reinvestment in existing facilities, savings on inland transport, traffic alleviation, revitalisation of cruise tourism, and increases in land values. The project would be paid for over time by port charges and cost savings, producing a 14 to 20 per cent return on equity with 90 per cent assurance.

Shippers have long been divided over the wisdom of moving the port, and one of their favourite arguments was the theory that such a huge investment would only raise the cost of living. But the Ecorys report dismisses that criticism: "Over the whole period, the project generates a net socioeconomic benefit of approximately $50 per TEU when compared with handling the containers at the current locations. Even if the container growth is only half of our main forecast, the project still shows a sound 12.1 per cent rate of return."

The financial model envisions that the port will be owned by a specially created public-private partnership, which will act as a landlord and be responsible for construction, general facilities and maintenance. Both the government and private investors will become shareholders in this company, providing 20 per cent equity financing with the balance funded by bank loans. Eventually, the project will be refinanced by a long-term bond issue.

Private port operators will pay a land lease fee to the landlord, as well as landing fees, pierage and harbour dues in line with current charges. The landlord will create a port authority which will outsource most operations to private contractors. Shipping companies will run their own operations and charge their customers accordingly. This model is closest to the existing market situation, the report says.

"It is in the public interest to safeguard a stable and reliable port system that the island needs for its existence," Ecorys says. "The island is too small to allow for more than one efficiently operating port area and the management model should reflect modern standards."

So the logic goes like this: as the economy grows, cargo volumes will increase leading to ship delays, draft restrictions and storage issues if the port stays where it is. This will raise prices for both terminal handling and sea freight. And the lack of space downtown is already forcing shippers to consider moving storage facilities to inland distribution centres.

It is now up to the Ingraham government (which has sent mixed signals on this issue ever since it was elected in May) to decide on the way forward in concert with the private sector (whose feelings are also mixed). It is a giant step, but in the view of many, business as usual is not an option. It's time to get off the pot.

Comments

[NISSIM MARSHALL]

TRAFFIC CONJECTION ON BAY STREET IS ALREADY INTOLERABLE, AND INCREASING. BIG TRUCKS ROAR ALONG SQUEAKING AND BELCHING SMOKE CANNOT BE ACCEPTABLE, TOURISIM IS DAMAGED BY SUCH EXPERIENCES, THIS MORE SO BY THOSE WHO ARE HOTEL OCCUPYING VISITORS. THEY DO NOT HAVE TO TOLERATE SUCH AGAIN AND NORMALY REPORT SUCH EXPERIENCE TO FRIENDS... HENCE DAMAGED TOURISIM.

[EB Christen]

I say your column should be nailed to the doors of the houses of Parliament every time! If Martin Luther got stuff done that way, maybe we can too!

Do politicians even read the smart people in this country or are they like Bush, or worse?

Marquis and Smith, please keep up the great work!

[Montgomery Pratt & Associates - Aechitects / Development Planners]

Nassau Harbour Relocation - While this reoprt seem to be very comprehensive in covering many of the present problems and potential solutions to the Cargo and Shipping Industry,it is some what a disappointment that no mention or consideration was made with respect to two critical infrastructure development challanges,which would provide even more economical impact and revenue generation.

Consideration: 1. A dedicated inland Toll Roadway System dedicated to freight and container traffic, 2. Inclusion of a Roll-on Roll-off Ferry Passanger/Freight Terminal, which primary function will be to link New Providence to Andros Island.

MAP&Associates is of the oponion, when one considers the economic potential, the incorporation of a Toll Roadway System, and a modern Roll-on Roll-off Ferry Passanger /Freight Terminal (a link to Andro)would contribute to an even greater social-economical impact to both New Providence and Andros Island.

mpratt.architects@gmail.com

[larry smith]

You may be right about a Nassau-Andros ferry link, but that wasn't part of the terms of reference. The remit was to determine the feasibility of relocating cargo port activities to SW Point.

I believe there is also a proposal on the table for a rail link between Nassau and the new port - not sure about a toll road but that is easy to implement.

[malcolm rae]

I had a thought about your relocation of the port.

IF IT EVER HAPPENS, who are the big trucks, oil tankers, et al, going to piss off? Lyford Cay? Albany? Bahmar?

Have you driven to the airport lately? Those same big monsters - which realy promote our tourism image - have put a hurting on my poor little vehicle when I have to go that way.

[larry smith]

Although the report does not cover that aspect, my understanding is that a new road corridor will be built leading to inland distribution centres.