Peter T. Leach | Aug 08, 2011 11:37AM EDT
CMA CGM will invest $100 million in a major container transshipment hub in Jamaica in exchange for a 35-year lease at the Kingston Container Terminal, the Jamaica government said Friday.
The French ocean carrier will use the terminal to transship containers from large post-Panamax containerships coming from Asia via the enlarged Panama Canal onto smaller ships that can call at ports on the East Coast of both North and South America.
The Port Authority of Jamaica said the enlarged terminal will accommodate ships 10,000 20-foot equivalent container units and larger. The agreement also provides CMA CGM the option to increase its investment in the state-owned KCT.
The port authority said the terminal improvements will be a “the catalyst for an increase in cargo volumes, and the creation of approximately 1,000 jobs by 2015."
CMA CGM, the world’s third-largest carrier, will make its investment by 2014, when a larger set of locks at the Panama Canal is schedule to be completed.
Speaking at the signing ceremony on Friday, Mike Henry, Jamaica’s minister of transport and works, said the agreement with CMA CGM marks a “significant step forward in the government's program for the privatization of the Kingston Container Terminal.”
To prepare for the larger ships that will be able to transit the Panama Canal after the new locks are completed, the port authority plans to deepen the channels leading into the Port of Kingston.
The Kingston Container Terminal has three main terminals to the north, west and south. The port authority said the agreement with CMA CGM is separate from the planned privatization of the KCT.
"PricewaterhouseCoopers (PwC) was only recently awarded the consultancy contract for the privatization, so we are just in the very preliminary stages of the process," the port authority said.
PAJ recently negotiated at least two contracts with PwC amounting to a total $3.8 million to advise it on the privatization of the KCT.
Prime Minister Bruce Golding officially announced in February 2009 his administration's intention to divest the profitable but capital-intensive port. The model of divestment is still uncertain, though there have been suggestions that an initial public offering on a stock market.
