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Port Authority, Maersk in major deal
Observer Reporter
Friday, November 18, 2005

Prime Minister P J Patterson (left); Port Authority of Jamaica president Noel Hylton (centre); and Steen Davidsen, senior vice president, Central America and the Caribbean, Maersk Line, at the signing of yesterday's agreement between the Port Authority of Jamaica and Maersk Line. (Photo: Michael Gordon)

MAERSK, the world's largest shipping line, yesterday signed a five-year contract to use the Kingston Container Terminal as a regional transshipment hub, an agreement which the Port Authority of Jamaica estimates will bring it about US$210 million (J$13.3 billion) in business over the period.

The agreement, officials acknowledge, will provide added incentive for the PAJ to push ahead with a recently-approved US$200 expansion, which will more than double the handling capacity of the terminal to 3.2 million TEUs (20-foot equivalent unit) from the current 1.5 million TEUs.

"Whether or not there was this agreement we were going ahead with the expansion of the terminal," Jamaica's transport and works minister, Robert Pickersgill told the Observer last night. "But the Port Authority projects that over the period it will provide services to Maersk of over J$13 billion, which, orf course, is payable in US dollars."

The container terminal is owned by the Port Authority of Jamaica, which retains responsibility for its marketing, and is managed by APM Terminals, a subsidiary of the AP Moller-Maersk Group.

The Kingston Container Terminal, currently ranked 56th in the world, has been on a rapid expansion, recently completing a US$80 million investment to increase its storage and handling capacity. The Port Authority has been aggressively marketing its services.

At yesterday's signing ceremony, Prime Minister P J Patterson said that further expansion is projected after the phase now about to start is completed.

"It is intended in the long-term expansion plans, to connect Fort Augusta (the women's prison just west of the existing transshipment terminal) to existing container terminal complex," Patterson said. "Preliminary work has already been started on this development, which, on completion, will provide additional capacity of over five million TEUs. At this point, we will achieve status as a world mega-transshipment hub, which is our long-term goal for the Port of Kingston."

The first of Maersk's ships to arrive under the agreement signed yesterday will dock in Kingston next April.

"We needed a sophisticated environment with a history of progressive evolution and the ability to service a highly efficient network," Maersk's senior vice president for Latin America and the Caribbean, Steen Davidsen, said yesterday in explaining the company's decision to set up in Jamaica.

"While doing this evaluation, one choice stood out," he said.
"With its continued success, excellent management and superb infrastructure, the Kingston Container Terminal embodies Maersk Line's needs for a major hub in our network."

Rosalie Donaldson, the Port Authority's senior vice president for international market, welcomed Maersk's decision, suggesting that it vindicated the authority's decision to expand and upgrade technology.

"We are positive that we'll be able to handle the increase in volume that Maersk will bring," she said.


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