US$500m windfall

La Brea, one of the most depressed communities in TT, sits on the threshold of economic prosperity with the proposed dry dock facility to be constructed over a four-year period.

It is being billed as a project that will become the backbone of La Brea and diversify the economy – one that would launch TT into an industrial centre for maritime traffic.

Last Friday, Prime Minister Dr Keith Rowley signed a cooperation agreement with the China Harbour Engineering Company (CHEC) for the development of the dry dock facility. CHEC had previously been blacklisted by the World Trade Organisation (WTO) for corruption but the suspension has since been lifted.

Both Rowley and Rui Wang, senior business and regional manager of the Eastern Caribbean, CHEC Americas Division, outlined prospects for development of La Brea in terms of housing, entertainment, hotels, catering and financial services, while painting a brighter picture of the fortunes for TT in growing its GDP by seven per cent. However, neither men gave estimates for the cost to build the facility, only forecasting benefits, although the Prime Minister said there is to be shared equity in the venture –30 per cent for CHEC, and 70 per cent to the Government.

Wang said the project would diversify the economy and put it on a sustainable path for development for the long term, through its own activities as well as an enabler of other industries. He said the project, driven by the expansion of the Panama Canal and the demand for a large size dry dock (longer than 300 metres), can transfer TT into a hub for maritime traffic.

Two dry docks measuring 420 by 68 metres, with a 420-metre long wharf will sit on 295,000 square metres of reclaimed land in La Brea. Wang said while the Atlantic Ocean accounts for about 50 per cent of docks of this dimension, almost 48 per cent are located in Europe and the United States. Based on its geographic location, TT is poised to capitalise on the demand for this type of facility.

“There is a necessity to build a large sized dry dock in TT to attend to the current and future demand for ship inspection, repair and maintenance in the region. By offering services that can attract large and very large ships, TT will be transformed into an industrial centre for maritime traffic.

“From a market perspective, due to its strategic location, competitive labour and energy costs, there is no viable competitor in this region for TT,” Wang said.

He predicts this project will generate foreign exchange in excess of US$500 million. In addition, it is set to galvanise at the local level, procurement of steel supplies, paint and other electromechanical equipment, and the transfer of technology through a partnership agreement with the University of TT.

Rowley said the opportunities, coming on the heels of the closure of the Pointe-a-Pierre refinery and the separation of workers are many, but only if the residents allow the facility to be built. The project is expected to generate 3,500 direct jobs during the design and construction period and 5,700 indirect jobs. During the operational period, 2,700 direct jobs and 13,000 indirect jobs will also be created, employing a large percentage of locals.

Emphasising that La Brea residents allowed golden opportunities to bypass them in the past, Rowley warned them not to make the same mistakes or else they would have no one but themselves to blame. He recalled but did not identify the economic loss TT suffered when BPTT took a decision not to build the Angelin platform in La Brea because of its previous experience with the Juniper platform project. Work stoppages and protests involving the Oilfield Workers Trade Union (OWTU) during the construction of the Juniper platform resulted in major loss of time and BPTT deciding to move the jacket component to Texas in the mid-2015 to meet project timeline. The topside for Juniper was completed in La Brea in January 2017.

Rowley appealed to the people of La Brea, “not to label yourself as a place of low production and industrial mischief but a place of excellence that the world is looking to.”

He stressed that the project is not a local business but one of international repute, and when a vessel leaves a port in any part of the world to come to La Brea for service, if there is uncertainty about delivery, performance or cost, it would move on to another location.

“This facility when built here, and I am asking you to get it built, when it is built here then we will have to begin to compete with where the ships go now, because the ship go somewhere now to get their services done. When we build it here we will be competing for some of that business. When you are competing, you have to offer attractive terms to bring the business to you, because nobody owes us anything. We have to earn it.”

He said if quality service is offered and the price is competitive, La Brea could very quickly build a reputation that would bring more business to the dock yard.

Rowley said China has come to the rescue of TT after he took the message to the premier and president of China on a recent tour with a plan to diversify the economy.

“We told the Chinese that while we acknowledge this project to have tremendous potential for TT, we want to go into it comfortably without the fear of failure, and the situation could only be arrived at if the Chinese partner with us in this project. So that when it is built they don’t have to wait for other people’s vessels to come into this facility. But if the owners have vessels that require this facility, then that should guarantee business at this facility. Against this background, the Chinese company has offered to take a 30 per cent equity in this business. It would be 30 per cent Chinese, 70 per cent TT.

“This project will have a certain amount of financing requirement and I can tell you, in our discussion with the Chinese, we have been reminded that a large number of the world’s largest banks are Chinese, and we expect that the funding will be easily available.”

Government has since been cautioned about the deal with CHEC, with surveyor Afra Raymond calling for details to be made public. Although the World Bank has removed CHEC from a blacklist, Raymond on Monday observed that TT has procurement procedures to disbar corrupt companies. He noted TT has to borrow to build the facility, and asked what would be the returns to the population. CHEC nor Government had not responded to queries about the deal up until the time of the publication of this article.