CDB study urges more investment, fast-track modernisation of regional ports

A Caribbean Development Bank (CDB) sponsored study on maritime ports in the region is recommending a major overhaul in policies; significant increase in investments to fast-track modernization; more private sector leadership, and greater focus among the Bank’s Borrowing Member Countries (BMCs) on improving efficiency.

The study is also proposing that Organisation of Eastern Caribbean States (OECS) countries examine and explore a regional port strategy given the limited volumes being handled in some ports.

“Investments should be made under prudent guidance and with an awareness of the regional developments. It would be a waste of public resources for all the OECS countries to invest in deep-sea facilities,” the report states.

These proposals come against the background of varying degrees of efficiency and productivity among the twelve ports examined in the study.

The report, Towards the Efficiency Frontier: Study on the Transformation of the Caribbean Maritime Port Services Industry was undertaken by Maritime & Transport Business Solution BV (MTBS) on behalf of CDB.

The gateways considered in the MTBS study were:

  • Antigua & Barbuda, Port of St. John
  • Barbados, Port of Bridgetown
  • Belize, Belize Port
  • Dominica, Port of Roseau
  • Grenada, Port of St. Georges
  • Guyana, Port of Paramaribo
  • Saint Kitts & Nevis, Port of Basseterre
  • Saint Lucia, Port of Castries
  • Vincent & the Grenadines, Port of Kingstown and Port of Campden Park
  • The Bahamas, Port of Nassau
  • Trinidad and Tobago, Port of Spain

The main aim of the study is to stimulate new perspectives on policies, practices and institutions to improve efficiency and viability of the regional port industry.

Maritime transport in the Caribbean was found to be challenged by inadequate infrastructure provision and inefficient port operations. These lead to delays and additional transport costs. The study notes that the level of efficiency of the ports has an impact on import and exports costs, with a resultant effect on the competitiveness of national economies. Port efficiency also affects growth in price levels and hence the level of poverty. Port efficiency was therefore a major focus of the study.

Indicators used in the port efficiency measure were berth productivity; labour productivity measured by TEUs per employee; quality of infrastructure; nautical accessibility measured by the maximum vessel draught; type of equipment used for stevedoring operations; type of IT systems used in port operations; and the level of autonomy of the port operator.

The Port of Nassau, in The Bahamas was the most efficient in the sample. According to MTBS, this was not surprising given the port’s newness and its joint public/ private sector leadership.

The second most efficient port was the port of Port of Spain, Trinidad which enjoys economies of scale, has the largest crane park and is a front runner on IT implementation.

Among CDB’s recommendations, based on the findings, are:

  • BMCs should combine funding with port reform, where applicable. As a development bank, CDB will exert its influence in order to realize port and/or labour reform, and work towards more efficient port operations.
  • Exploration of a regional port strategy for the OECS. “Given the limited volumes being handled in the ports, port investments are often not financially feasible. Investments should be made under prudent guidance and with an awareness of the regional developments. It would be a waste of public resources for all the OECS countries to invest in deep-sea facilities,” the study added.
  • Formulation of a master plan / feasibility studies, in order to maximise returns on infrastructure investment opportunities.
  • Allocation of funds to finance port labour training. The study recommended that specific attention should be paid to training of operational staff managed by the public sector which have been deficient with respect to the use of IT and equipment operation and maintenance.

The study also recommends that policymakers:

  • Take into consideration the regional and competitive environment. “Port development projects are capital intensive and require prudent investment decisions. It is therefore crucial to assume a regional perspective and to understand the regional dynamics and the role of the respective ports. The highly connected OECS ports should especially consider a regional perspective strategy.”
  • Allow the port organizations a higher degree of autonomy. “Political interference is found to limit the port authority’s ability to operate efficiently or to establish a long-term vision. A higher degree of autonomy can be realized through private sector involvement. The ports of Paramaribo and Nassau are prime examples of private sector involvement leading to a high degree of efficiency.”
  • Recognise the need for labour restructuring and work towards a viable long-term solution. “In numerous ports, labour is still functioning under traditional conditions devised in the break-bulk era. High labour costs weigh heavily on the port operations. This situation is unsustainable in the long term. It is recommended that policy makers move towards a long-term solution.”
  • Embrace a long-term port development vision concerning port development. “In a number of countries, there is no long-term port development vision that is embraced by the various stakeholders and being executed. The lack of a common long term vision hampers development as investors are uncertain of the future.”

The findings and recommendations were presented for discussion at CDB’s 46th Annual General meeting, which concluded in Montego Bay, Jamaica on Thursday.