Investment flows into Jamaica – Will the Kingston’s Container Terminal upgrade help?

By Gordon Feller, special to the AJOT

Unbeknownst to many, a US$452 million port modernization project is moving towards completion in Kingston, and it’s already remaking Jamaica’s major port. 

The InterAmerican Development Bank (IDB), a multilateral financial institution owned by national governments and based in Washington DC, is leading the effort. It’s providing the “A-Loan”, with a commitment of US$125 million, and a “B-Loan” of US$90 million. The China Infrastructure Fund is also providing a loan, with a commitment of US$50 million. The borrower on the project is the Kingston Freeport Terminal Limited (KFTL).

The Kingston Container Terminal (KCT) is one of the largest container and transshipment ports in the Caribbean. Before the new project, KCT included the following: one quay 2,410 m in length, one 94 hectare (ha) yard area with a capacity of 2.8 million TEU, and a draft at berth of 12.5-13 m. KCT’s operating equipment consisted of 14 gantry cranes, 28 operating straddle-carriers, 14 reach-stackers and empty-handlers, eight tractors, 64 trailer chassis, and 27 truck chassis.

The government-owned Port Authority of Jamaica (PAJ) launched a procurement process to grant a 30 year lease concession to a private party to finance, expand, operate and maintain. The Concession consists of a landlord model under a 30-year term, in which PAJ retains ownership of the physical infrastructure, while a private concessionaire operates and maintains existing facilities and undertakes the design, build, and financing of KCT’s development. 

KCT will be transferred back to PAJ at the end of the Concession. A consortium formed by two project sponsors -- CMA CGM and Terminal Link -- was awarded by PAJ the concession after a bidding process. A special purpose vehicle, called Kingston Freeport Terminal Limited (KFTL), created for this project, is owned by CMA CGM of France and CMA Terminals Holding of France. CMA CGM Group consists of the combined companies Compagnie Maritime d'Affrètement and Compagnie Générale Maritime, which is the third-largest container shipping company worldwide and number one in France. CMA Terminals Holding is the fully owned subsidiary of CMA CGM Group, and it has responsibility for dealing with a portfolio of 25 container terminals all around the world.

KCT is located in Kingston Harbour on Jamaica’s southeastern coast. The Harbour encompasses about 26 km2 of navigable water with depths of up to 18 m and includes at its western margin the shallow Hunts Bay. The southern margin is a 15 km long shingle spit, the Palisadoes, a formation built by sediment long-shore drift tying together a number of coral cays.

The Harbour entrance is a 2 km wide channel (the Ships Channel), providing navigable access to its inner basins. Outside of the Harbour the channel, the peninsula is known as the Palisadoes.

The project enabled expansion in three phases:

• Phase 1  consisting of the deepening the channel, turning circle and quays to allow access by 14.2 m draft vessels; and within six years, capacity optimization from 2.8 million TEU to 3.2 million TEU. 
  
• Phase 2 increases the draft to allow access by 15.5 m draft vessels. 
  
• Phase 3 (not yet begun) will build a new berth in order to increase KCT’s capacity to 4.5 million TEU. 
  

The objective of the initial program (Phases 1 and 2) has been to increase the capacity of the port such that it will be able to accommodate the largest vessels transiting the expanded Panama Canal. This goal is being achieved by construction work which increases the capacity of the quays at the berths to allow larger vessels; dredging the shipping channel for greater draft; and increasing the stacking yard capacity through new equipment and operational changes. 

The project includes the following:

• Operation of the existing port facilities, wherein KFTL will take over port operations as part of the concession. This is to be followed by the operation of expanded port
  
• Equipment and infrastructure upgrades, specifically the South existing quays: KCT2 & KCT3: 1,200 m.
  
• The ship turning circle, plus the dredging for new vessel draft requirements (wherein the final result is 14.2 m for phase 1, and 15.5 m for phase 2). 
  
• Disposal of dredged sediment material.
  

Port operations mainly consist of transferring containers off and on ships and storage areas. This is completed mostly using straddle carriers for full containers and tractors with trailers and handlers for empty containers. When the project is completed the port will be predominantly focused on transshipment (around 90% of activity). KCT will then be open for delivery six days a week, 16 hours a day. 

Container Freight Service (CFS) at Kingston involves freight loading onto containers. This will take place in the warehouse, with a separate gate to avoid mixing container trucks with CFS trucks, thereby keeping them out of the terminal. During the first years of operation CFS activity will take place on an eight hour day shift, five days a week, and will be extended according to needs. Upon the completion of this project, and even sometimes beforehand, containers are to be inspected by Customs in a dedicated location, carried out by scanning the container and/or through physical inspection of the cargo. There is a program of preventive and corrective maintenance for both the facility and the equipment. Ancillary activities typical of port operations are also included, as well as third party activities – including fuel supply, waste disposal from terminal activities or vessels, maintenance dredging between the berths (in a space which is 60m across). However, maintenance dredging of basin, turning circle and channel, remains the responsibility of the PAJ.

The quays will be refurbished and strengthened. Out of the total 2400 m length,  a subset of 1200 m of the quays will be capable of accommodating the New Panamax vessels. The terminal container yard will, at the end of the process, have a capacity of 102 ha.

To increase terminal efficiency and capacity to 3.2 million TEU per year, the equipment upgrades include the purchase of four new cranes to make a total of 18 Quay cranes and 64 straddle carriers. Additional quay refurbishment and strengthening will be completed. Several existing cranes will be decommissioned by the PAJ prior to port handover.

The Phase 1 dredging work in the Inner Harbour will realign and deepen the navigation channel for 9,000 TEU vessel (draft of 14.2 m) to safely sail (and potentially 12,600 TEU vessels partially loaded), and a new swing basin for ships to turn around. The overall length of affected channel is 6,800 m and the area of basin affected is 1,200 m. The Inner Harbour is to be dredged to 15.6 m with a minimum width of around 280 m. The seabed within the Inner Harbour is generally formed of soft materials such as soft clays, weak peaty clays silts, etc. The quantity involved is in the range of 6.6 million m3. 

The Outer Channel (which is the East channel, located northern part of Rackhams Cay) will not be affected by dredging works. It has 230 m minimum width, despite some individual outcrops or ledges to be cut. As the East Channel is more exposed to swell, a bottom surfacing to 18.5 m depth is required to allow sufficient under keel clearance for 14.20 m draft vessels in case of heavy swell. These outcrops represent approximately 3,500 m3 of dredging.

In Phase 2 the dredging works will deepen the realigned Inner Channel from the Phase 1 depth of 15.60 m to 17.0 m to allow 12,600 TEU vessels with a draft of 15.5 m the clearance for safe sailing conditions all the way to the swing basin. The dredging sediment quantity involved is in the range of 5.0 million m3.The dredging quantity involved is approximately 2.2 million m3. From the end of the Ship’s channel into the Eastern Channel: the seaward areas of the Outer Harbour and the East Channel will more exposed to swell to deeper draft vessels (15.5 m in phase 2 versus 14.2 m in Phase 1). Thus, the depth for dredging here would be 20.2m (instead of 18.5 m required for phase 1), and the width proposed would be a minimum of 230 m, as originally anticipated by the Port Authority. The sediment in the Outer Harbour (located in the northern part of Rackhams Cay) is composed largely of sand and silt. The total amount of sediment to be removed from East channel is estimated at 250,000 m3. 

As with Phase 1, there will be some specific outcrops that will need to be removed to achieve the desired depth, but these will not include previously anticipated removal of parts of Rackhams and Gun Cay.

At the Existing Port facilities the current design consists primarily of an approximately 14 ha area on the south side of Gordon Cay. This includes reclamation of a small part of southeast Hunts Bay (adjacent to the Portmore Causeway) and the north western corner of Gordon Cay. This project’s activities are expected to have implications for flows under the causeway bridge, and by extension the stability of existing coastal structures as well as the movement of fauna in and out of Hunts Bay as well as flooding potential. Narrowing of the area adjacent to the Harbour side of the causeway inlet/outlet could result in increased current velocities, eddy currents, sediment transport, freshwater plumes and changes to the hydrodynamics of the Harbour. Due to the potential impact on flows in and out of Hunts Bay this activity has been removed from the Project and may be considered for Phase 3, but only after additional evaluation of design options to mitigate these impacts.