Renewing the inland from the coastline

In September 2014 you presented detailed plans on how the nation’s port infrastructure will be transformed and modernised. What role will the country’s redeveloped port infrastructure play in turning the country into the “economic powerhouse of the Caribbean”, as envisaged by the Prime Minister?

Antigua and Barbuda is very well positioned to lead the Caribbean in a number of ways. Geographically it is well positioned in the middle of a chain of islands and from a logistics perspective it is also well positioned, being the only island in the region that has multiple daily connectivity to almost every island in the Caribbean through LIAT airline. That unique feature has not really been utilized to date for the major commercial benefit of Antigua and the wider region, and I think that is something that can be changed – particularly with a brand new airport soon to open in Antigua, which can facilitate larger air cargo flights into the country. That cargo can be subsequently ferried onwards either by air or sea, which means Antigua has great potential as a logistics centre.

From our side, the port and harbour, there are some things we have to do to ensure we have an efficient, effective port. We believe it is not just ok to have a port, we think the port should actually be an engine for economic and social transformation. We believe the efficiencies we generate at the port should translate into lower, more manageable pricing in the stores and supermarkets inland. We also believe the service we provide should be such that businesses can actually trust that there will be fewer and fewer disruptions in the delivery of service.

We are going to demonstrate to the region that it is possible to turn the port into a very viable contributor to the treasury and to the overall development of Antigua and Barbuda, with the public and private sector working hand-in-hand.

With that in mind, the port would then position itself to provide services that would be able to facilitate trade in the region. We are developing a logistics park at the port, which would facilitate distribution from foreign countries into the region. That relationship with our neighbouring islands, depending on the services that we create at the port here, is going to create a whole new environment and make Antigua far more attractive than it is right now. And we are building this based on the fact that there is already an established dependence on air connectivity in Antigua.

There are advantages here in Antigua that we believe should be optimized. One of them is the space at the port: it has not been developed to its maximum, so there is room for development. We are looking to see how we can utilize the space here to facilitate transhipment, storage, and some light manufacturing, and then forward those benefits to the neighbouring islands.

There are some companies in Mexico, China, Panama and the US that have been interested in bringing their products here. We also believe the trend in the industry is to try to get closer to the market base, so that when an order is placed, you don’t have to wait 2 or 3 weeks to actually fulfil it. What we have to create is the environment and mechanisms to be able to receive the orders, and then create the channel of distribution that can get them to market quickly. As part of the overall strategy, we would be looking at trying to facilitate fast ferry systems, smaller delivery ships, and we may be interacting with different container lines. All of these things combined would facilitate the expansion of Antigua’s role within the region.

The government has already approved more than $3 billion worth of investments since it was elected in June 2014. One month after you presented those plans in September 2014, the government announced Kylin International was willing to spend $2.2 billion on revamping Antigua’s port infrastructure. Then in December, the Prime Minister announced that the China Civil Engineering Construction Corporation would be the ones to modernise the port, with an investment of $255 million. How was this decision reached?

First of all, we sat down to look at a very sustainable plan, as we needed to have something economically viable. The port is actually sinking into the sea and we have to repair it, so there is an urgency required; this is not just a simple upgrade. That being said, when we did some studies on the sheet piles and the seawall we noticed that the piles has dropped and the seawall had shrunk from 13 millimetres to 1.5 millimetres thin, so it is just a few steps away from becoming a massive problem.

So we needed to redo the port, and when doing that one has to take into account what transpired when we first built this port in 1969. It was built to facilitate brick wall cargo. In 1971 the first containers showed up and the port became obsolete just a few years after construction. We have had to function that way for the last 40 years and that has been very difficult, painful and costly. So, in strategizing this new port, the pressure was on to make sure that in 2 years, with the advancement of technology making it easier for things to become obsolete sooner, it is still viable.

Ports are constructed in 50-year cycles, so we know we won’t be touching this one again until 2065, when we probably won’t be around anymore. But between now and 2065, we would have to put in some of the advancements that we think should be in place. So we are thinking of putting cables into the ground so we have internet connection and wireless transmission throughout the facility. We are going to make the port ready for advancements that may come in 10 or 15 years. We are structuring the port so that we have enough space to allow us to function within a much more controlled environment but with the capacity to exceed what Antigua needs so we can cater for what some of the other islands may need. So in terms of storage, we are going to have from 5 to 8 times more container space. We have also decided we are going to turn the eastern side of the pier into a logistics park, as previously mentioned.  

In designing the port, we knew that we would need large sums of money to be able to get that done. But there still needs to be a sustainable component. It is all paid for within our plans.

One unique thing is the transformation of the warehouse into a dual level facility. We would move to a one-stop shop environment, so that you would have agents on the bottom floor providing services to their costumers and on the top we will have customs, the Port Authority, and all of the services that costumers today have to visit six different buildings for.

The plans are revolutionary because for the first time – and Antigua would be leading in the region in this – the Port Authority would not be the one interfacing with the private sector, it would be agents interacting with agents and as such, the delivery of services would be done by the entity that is actually conducting the service. This change will create an environment where businesses can actually ask for and receive the excellent services they require, because they can move from one guy to the next until they find their ideal service provider, creating competition. We think that engagement with the private sector will create a really different environment and it is one of the reasons I think the development of this strategy is useful and unique because your services will no longer be just focused on Antigua, you can offer a service here that you can take to many different islands.

The warehouse is the real game changer. Today, you have one port authority, in the future, when this is constructed, you will have 12 different service providers competing to provide services to the best of their abilities; competition creates differentiation in product delivery and services and that may also help with pricing. We think all those factors will create the first truly competitive free market port environment that I believe would be a true driver of change.

What we are attempting as well is to incorporate the air and sea cargo into this facility. I think it would certainly work brilliantly. When you think of Antigua you think of a very small environment, especially for those who have been exposed to larger countries. An airport the size of JFK is much, much larger than Saint John’s.  Consequently, if you landed at one passenger section of JFK and had to go down to the cargo section of JFK it would take you longer than to go from the airport to the sea port in Antigua.. When you think of it in that sense, if we incorporated all of the cargo into one logistics hub, we would have better utilization of scale, centralization of all services, and you would have less need for manpower.

In the end, while everyone thinks it would be more expensive, I believe the conditions could be created here to ensure that even if you had to transfer the goods, there are benefits that could be given to the service providers that could reduce that to almost nothing. If we got to this point, this warehouse would become the busiest commercial environment in all of Antigua and it would surely act as a major regional distribution component, because now you would not only have ocean access but also air access.

Now, going back to the money side, we believe that taking into account all of this, the money we are looking for is not an exorbitant sum, it is something we can certainly afford to pay back, especially once we get to the proper efficiency levels. With that in mind, we have spoken to companies all over the world who want to find out how they can participate in what we are doing at the port.

We have had some very exiting proposals and interest shown. The Prime Minister established a cabinet committee to facilitate the process along with the Port Authority and that group was responsible for evaluating each of the potential investors. What we have done with everyone is meet them and analyse what their capacity is. Some of these companies were not only interested in financing, they wanted to construct the port as well, and if you are telling us you can construct a port, we want to see a port you have constructed before. So we have done some traveling to see these ports as part of our due diligence.

With regards the chosen company, the Prime Minister has announced it is CCECC, China Civil Engineering Construction Company. They have gotten the nod and they will be providing us with the funding, manpower and technical requirements to actually construct the port.

We have talked a lot about the transformation of the cargo port but we also know there are exciting plans for the transformation of the cruise port…

Yes, part of that will be to redevelop the Heritage Quay area and we are looking at adding a hotel and marina there and upgrading the facilities, transforming the northern side of Saint John’s harbour into a far more beautiful site.  We want to ensure that when you come in on the ship you look at something much more pleasant than what you see today. That entire area, all the way to where the ferry docks, will be transformed into a beautiful waterfront environment. We are also going to put in a national museum and some shopping facilities.

We had planned to extend the seawall out to the pier to facilitate the berthing of a cruise ship, but eventually the decision was made to move the cruise ship berth further east to Heritage Quay. So that gives us at the port a lot more space to facilitate the type of development we need for our logistics park.

What benefits will the logistics park specifically bring to Antigua and the wider region?

The concept of the logistics park is based on a trend in the industry where there are actors who want to go further down the value chain. So whereas the port would just want to unload containers, we are now saying we can also facilitate a process by which a few distributers could actually utilize our space and then we can ship it back out. We have one Mexican company that is interested in bringing in a ship with its own cargo, and that same company supplies a Mexican port that has a similar population to ours. They are waiting for us to create the environment and before you know it, we will be getting direct supplies into the logistics park. Some of it will be distributed locally and we can ship the rest to them on a boat or plane.

If we could close with a more personal question: we know you are a young entrepreneur who has already achieved a great deal. Your banana business in Dominica is celebrated as one of the region’s great agribusiness success stories and you have worked as a consultant to the World Bank. You were appointed just this year on a two-year contract, what are the major targets you hope to have achieved by the end of that two-year term?

With the World Bank I learned the concept of trade facilitation and the requirements to have ports run efficiently. It is not okay to overburden the port with the expense of inordinate amounts of labour, because that only hurts down the road.

If the port is inefficient and expensive, your cost of living will be high. So, one of the things we wish to see first is to transform the current inefficient, costly environment into a much more controlled and efficient environment. And as that happens we want to see it translate into a reduction of costs in stores. So, as we push through, we are hoping we can influence the inland from the coastline, which is the tagline we developed for the port development plan: renewing the inland from the coastline. So the port is going to help develop the country.

The second thing we want to see is the creation of a safer and more efficient port operation environment.

One of the most monumental things I would like to do is transform the warehouse. I think if Antigua is going to change, this is what is going to do it. This is what I am most excited about.