The development comes roughly a month after the concessionaire of the Kingston Container Terminal expansion project signed an agreement with Cuba for the development of the Mariel Logistics Hub, which raised concerns especially as it related to the full ownership of Terminal Link CMA CGM and the ability of the entity to fast-track Jamaica’s port development and the dredging of the ports.
But Shirley told the Jamaica Observer that this new agreement “might result in the expansion moving faster as the alliance between the largest countries on the globe with some of the largest lines to develop assets is going to change the way maritime trades.”
“One has to place what is happening in the Caribbean in the place of those global developments to understand the full implication. Today there are four alliances together that accounts for over 85 per cent of all the cargo that we use across the globe that is now becoming highly concentrated. In parallel with that we have the formation of global terminal operators,” Shirley told the Business Observer.
He was speaking at the Private Sector Organisation of Jamaica and Jamaica Money Market Brokers Imperatives for Growth – Options and Opportunities Forum at the Jamaica Pegasus yesterday.
According to reports, CMA CGM and the Export-Import Bank of China (CEXIM) have signed a framework agreement on financing solutions for a total of up to US$1 billion in the form of loans and/or export credit insurance. The solution is expected to bring the carrier lower-cost financing which will be available for the future vessels and containers the group may order from the country.
Over the years, the CMA CGM Group has been ordering most of its containers from the Chinese group CIMC. The Group will be taking delivery of three 18,000 twenty-foot equivalent unit (TEU) ships from Chinese shipyards later this year.
The shipping giant stated that it would jointly investigate and develop opportunities from Beijing’s ‘One Belt, One Road’ project and collaborate on the Maritime Silk Road, which is aimed at boosting trade to and from China.
“It’s a multi-billion-dollar deal really focused on the ports in Asia and Africa. It’s affecting that side of the world and it will affect this side of the world eventually in that the investments that are being made in Jamaica are part of a larger global strategy,” Shirley stated.
“So where we started as a fragmented industry we are moving towards an industry that is highly concentrated among carriers and terminals and also the capital requirement by virtue of the vessel sizes, and the reinvestments in the terminals is increasing dramatically. There is also the change in geopolitics to which careful attention has to be paid.”
In April, CMA CGM signed a concession agreement with Jamaica under which it will invest US$600 million to upgrade and expand Kingston Container Terminal (KCT) and operate it for 30 years, as well as spend US$130 million to dredge Kingston Harbour.
The planned terminal extension is expected to turn Kingston into one of the Caribbean’s top five ports in line with the expansion of the Panama Canal, which is expected to be completed in 2016. The expansion will allow the deployment of up to 12,600 TEU vessels in Jamaica.