Goat Islands going... going...
BY BALFORD HENRY Senior staff reporter
balfordh@jamaicaobserver.comSunday, November 03, 2013
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IT'S almost a certainty that by this time next year the Goat Islands will be virtually in the hands of China Harbour Engineering Company (CHEC), and well on the way to becoming the first Chinese-owned transshipment port and logistics hub in the region.
That conclusion became clear after the statement to the House of Representatives last Tuesday by minister of transport, works and housing, Dr Omar Davies, as well as the opinions expressed by the newly appointed chief executive officer and president of the Port Authority of Jamaica (PAJ), Professor Gordon Shirley, at a press briefing at his new office last Wednesday afternoon.
Although Davies insists that the final decision will be taken by the Cabinet, his statement to the House seemed to confirm that, in the meantime, he plans to do all that is necessary to ensure that the project meets with the approval of his Cabinet colleagues, when a framework agreement reaches them by January.
Quoting from the environmental management scoping study of the Portland Bight Protected Area (PBPA), which was commissioned by the PAJ, Davies said: "The PBPA is not exclusively an environmental conservatory and is intended to facilitate multiple activities in a sustainable manner."
He noted that the area, although hosting important natural heritage resources, also has a number of major industrial, commercial, residential and agricultural activities, including a Jamaica Public Service power station and an ethanol plant, while its fish sanctuaries are already so degraded from dynamiting and overfishing that fishermen have been forced to turn to the Pedro Cays.
Shirley, who took over as the head of the PAJ last Friday, called in the press to give his views on the project which were also informed by the Conrad Douglas environmental management scoping study the minister had relied on.
"What we know is that this is a large project, about US$1.5 billion. We think that the jobs that would be created, if we were to have an investment like this, would have a substantive impact on our economic development prospects," he said.
"It is the only investment of this type that I am aware of and, yes, I think we need to pursue the opportunity to see whether this is so," he said in response to a question.
Shirley also said that the offer for the Goat Islands project came from China Harbour Engineering Company Limited (CHEC), a world-renowned international contractor that is a subsidiary of China Communications Construction Company Ltd (CCCC) and which has been performing as the main contractor for Chinese infrastructural investments in Jamaica since 2009.
CHEC officially opened its Jamaican offices on April 22, 2010 after signing an agreement with the Government in 2009 to be the general contractor under the Ministry of Transportation and Works and the National Works Agency for two main projects -- the Palisadoes Shoreline Protection and Rehabilitation Works and the all-island Jamaica Development Infrastructure Programme (JDIP).
The company was also in charge of the construction of the Rio Grande bridge in St Margaret's Bay, Portland, and the Westmoreland bridge in Georgia, St Mary, and is currently constructing the North-South Link of Highway 2000.
The company has had a somewhat shaky relationship with local trade unions since 2010, primarily because of positions it has taken on benefits normally paid to local construction workers under a Joint Industrial Council (JIC) arrangement.
One such benefit is the 16 per cent end-of-project bonus paid by local construction firms at the end of each project, which was also paid to the workers employed by French contractor Bouygues.
The two main trade unions -- the Bustamante Industrial Trade Union and the National Workers' Union -- have constantly raised concerns about the way CHEC operates, including the fact that the unions have not been able to organise labour on any of its other sites in Jamaica over the past three years, despite a JIC arrangement which normally gives them automatic access to share union dues 50/50.
CHEC has also earned the wrath of some members of parliament for its constant refusal to appear at Gordon House to entertain questions from Parliament's Public Administration and Appropriations Committee (PAAC), on the issue of some $700 million being claimed, up to recently, by local contractors for work done on the JDIP for which they have not been paid.
The PAAC has, without success, made two attempts to get CHEC's representatives to attend one of its meetings to explain the delayed payments.
On the last attempt, at the beginning of October, Dr Davies personally wrote to the PAAC chairman, Edmund Bartlett, suggesting that summoning CHEC would "set a bad precedent".
"Whilst I appreciate the desire of members of the PAAC to have full responses to the claims by contractors, I would suggest that the summoning of CHEC to appear before the committee would set a bad precedent," Dr Davies wrote.
"Notwithstanding, in recognition of the need for answers to questions being posed by members of the PAAC, I undertake, as minister, to meet with all parties in order to be able to provide you and the other members of the PAAC with full and complete responses to your questions," Davies wrote.
The letter was received on October 2. However, one month later there has been no resolution to the issue.
But it was a bit strange that Davies expressed a willingness to meet with the contractors to avoid CHEC having to appear before the committee, after ignoring a letter sent to him some six weeks earlier by 13 of the local contractors affected by the delayed payments, seeking a meeting with him within 14 days to try and resolve the issue.
The North-South link of Highway 2000, which is currently in progress, is understood to be the first investment by CHEC in any local projects, as the JDIP projects were all financed by the China Ex-Im Bank out of the US$400-milliom JDIP loan.
CHEC has invested US$610 million to complete the North-South Highway. In addition, the company has also agreed to reimburse the Government the US$120-million it had spent on the Mount Rosser bypass road. This came as a huge surprise to PAAC members when they first heard of it late last year.
Both former Prime Minister Bruce Golding, and his Minister of Transport and Works Mike Henry confirmed that CHEC has always been interested in constructing a transshipment facility on the Goat Islands, to benefit from Jamaica's proximity to the newly expanded Panama Canal, scheduled to reopen in 2015.
But Golding and Henry had insisted that the project would have to be constructed on the Jamaican mainland.
"Unlike its competitors in the region, including Miami, Jamaica can provide the most cost-effective and timely movement of cargo utilising a sea/air movement," Henry insisted. But those negotiations with the Chinese stalled when the JLP Government refused to agree to the Goat Islands as the site of the project, insisting instead that the Chinese investors work with the Fort Augusta area of St Catherine.
Golding told a lecture series audience in New York on October 22, he still held fears that the investors may be thinking about a "Chinese enclave", to which Jamaica would have limited access. That argument was also raised by Henry in recent discussions in Parliament.
Last Wednesday, Professor Shirley, who has been intimately involved with negotiations between the PAJ and CHEC for some time, confirmed that the Chinese firm has been rigid in its demand for the Goat Islands and has turned down three other sites offered to them.
Shirley related CHEC's refusal to accept the original offer of the Fort Augusta lands in St Catherine, insisting that it needed more space for both a transshipment port and a logistic hub.
He said that CHEC instead surveyed the south coast of St Catherine and Clarendon, which it felt was more suitable.
"They decided that they wanted to build a facility at Goat Island and have access to land on the mainland, which would be connected by some form of a bridge, and would also be connected to the North-South Highway link and the South Coast highway," he explained.
He said that the PAJ also offered two more alternative areas for the project, including one close to Port Esquivel, St Catherine, and one at Rocky Point in Clarendon, but those were also rejected by CHEC on the basis that:
(i) the land area was too small; and
(ii) the port facilities would be exposed to winds that could make it difficult for vessels to access the port.
"You can't have a transshipment port that could be subjected to that kind of uncertainty. There were some things that could be done,
but that would be extraordinarily expensive," Shirley volunteered.
However, he said that recognising the environmental significance of the Portland Bight Protected Area, including the Goat Islands, the PAJ decided on an addendum to their MOU with CHEC, which led to Conrad Douglas and Associates being commissioned to do the environmental management scoping study.
"It was simply to find all the information that we could on the Portland Bight Area, the environmental conditions, the state of it, and so on," Shirley stated.
He noted that the study showed that: there were nine islands and nine cays in the area; there are 68 international and national policies and legislation, regulations and standards that may be applicable to the establishment of the project conceived by CHEC in the Portland Bight Area.
On this basis the report noted the importance of developing a plan for financing the efficient and effective management of the natural resources of the area.
In terms of the history of the area, it was confirmed that the Tainos, the original Arawak Indians living in Jamaica on the arrival of Christopher Columbus, lived in villages near to the Goat Islands.
Columbus is said to have named the area "Cow Bay" in honour of the manatees he found there. Henry Morgan, the famous Port Royal pirate, maintained his vessels at Careening Bay, in the area.
The PBPA also hosts important national heritage resources, and key biological resources including rare, threatened and endangered species of animals and plants, including tree frogs, thunder snakes, dwarf snakes, blue tailed galliwasps and the Jamaican fig-eating bats.
Invertebrates are represented by five species of blind cave-dwelling shrimp, and the Hellshire Hills are still considered the home of the Jamaican iguana. There are also signs that the Jamaican coney, once considered extinct, still inhabits the area.
Over 271 plant species have been identified in the Hellshire Hills, including 53 which are endemic to Jamaica, and 15 endemic to the PBPA.
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