While oil-rich Bahrain has its man-made Amwaj Islands and Dubai its artificially built Palm Islands, which houses the famous Burj Al Arab seven-star hotel, T&T is another energy- rich country in line to build its own artificial island. The Port-of-Spain Dry Dock and Sullivan Island project seeks to position T&T as a dry dock hub in the hemisphere.
?Etienne Mendez, chairman and chief executive officer of Trinidad Dry Dock Company Ltd, said this project would place T&T at the centre of the Western Hemisphere and added it is a "world scale project." "We envisaged 11 years ago that we could build a dry dock that could accommodate the largest ships in the global fleet.
Our research told us that the Western Hemisphere was home to a mere 15 per cent of the global dry docking capacity, which meant that the ships operating on this side of the globe needed to go to the Far East and Europe to access their required dry docking," he said last Friday at a media conference. He added that dry docking is done to repair ships, to inspect ships for insurance purposes and to certify ships for general operations. "If the ship is not inspected periodically, it cannot get insured and if they are not certified, they cannot carry cargo. It is a captive industry.
Having identified it, we zeroed in on creating this project," he said. Mendez was speaking last Friday at the signing of an memorandum of agreement (MOA) between InvestTT and Trinidad Dry Dock Company at the Atrium, Don Miguel Road Extension, El Socorro. Racquel Moses, president of InvesTT, who was also present at the signing, said this is InvestTT's largest project to date. "This projects is one of our targeted sectors, which is the maritime and a huge opportunity for growth.
Once we sign this agreement, it will be the biggest opportunity in InvestTT's portfolio with a potential capital expenditure US$2.1 billion upon completion. The signing will get us up to the stage of facilitating environmental assessment which will take place over the next year," Moses said. John O'Sullivan, co-founder of Trinidad Dry Dock Company, who died in 2008, initiated the concept of the island and envisioned a shipyard capable of servicing the largest ships in the global fleet.
The island is to be named after him. Sullivan Island The MOA will result in the building of a dry dock island where foreign vessels can dock off Trinidad to be named the Port-of-Spain Dry Dock and Sullivan Island and would be 140 acres in size off Sea Lots in the Gulf of Paria. "We will build it in a location that is shallow and we will dredge that shallow area to retrieve close to 11 million cubic metres of material and use that material to create that island to five metres over sea level.
We will then excavate to ten metres below sea level and construct concrete bases on piles to support these huge ships and they will be the dry docks. The ships will come in and be serviced," he said. He added the project should take five years to complete. "The one-year environmental impact assessment has been determined by the Environmental Management Authority (EMA). We spent close to nine months negotiating for the terms of reference for this.
We finally got their blessings and final document at the beginning of this year. We know how the project will affect the environment and how our dredging will impact on the economy. Will if affect the Gulf or Port-of-Spain? Once our preliminary assessment says there is no major adverse impact that will cause damage, we will go ahead and start construction," Mendez said.
He said this project will benefit T&T's economy. "We project 3,500 construction stage jobs and close to 10,000 operational jobs in the primary sector in dry docking and additional 5,000 jobs in the services sector. The project will have residential facilities and recreation facilities. With eight ships in dock and a crew of 30 persons, we can entertain these people. So we are creating facilities for the people on the island," he said.
Investors
Calling it a "huge job", Mendez said US$2.1 billion is the current estimate for the construction of the facility.
"We propose to raise 25 per cent of that in equity from private sector investors and to borrow the 75 per cent remaining to complete the job. We had interest from Brazil, Korea, Singapore, China, the Inter-American Development Bank (IDB) and interest from the United States. They have all expressed interest in this project," he said.
Mendez said they are also targeting "sectors" to help raise equity.
"The shipping industry is one of the industries we can approach for investment capital. We had dialogue with Royal Caribbean in 2009 and it was about getting a stake in the company so that they could have dry dock guarantee for their large vessels, which they have to go to Europe and the Far East to do right now. I met with Royal Caribbean's vice president last week in Connecticut and the discussions are still on the table, so that is just a sample.
"That is a lot of money to be raised and we do not expect to raise it as a start up. We propose to have incremental approaches to the investment community year by year to get the funds for the upcoming year's operations. As we add value to the project, we can go to the market with a higher share value and seek to raise the capital we need," he said.
Asked how they intend to raise the debt financing, he said they are in discussions with the IDB.
"Those discussions go back to 2009. Their interest is still there, but they need to have the assurance that the Government of T&T is behind this project which we can now present to them. The IDB is funding a large project in east Port-of-Spain aimed at stimulating there economically.
"They now see this project as providing synergy with what they are doing in east Port-of-Spain separate and independent from our project. We now need to resume discussions with them having executed this MOA," he said.
Mendez said he is not aware of other dry dock projects in the Western Hemisphere that may provide competition to their project.
"The shortfall in dry docking capacity that we have identified in the Western Hemisphere informs us that when we become operational, we become cash positive and start generating revenue. We can even look for options to build a second one. The US Navy has booked most of the dry dock sites in the south, so the commercial sector has to shop around," he said.
Mendez said they also want the local construction sector involved.
"When we look at the concrete for dry dock bases which have to be supported on piles and constructed ten metres below sea level, I do not believe we have the capability to tackle construction on that scale. We have five dry dock bases. We may be able to go with local contractors for the smallest one, but it is extremely difficult construction. We may have to go overseas for the larger ones. The sheet piling which encloses the island can be done locally, given the 225,000 square feet of it, we may not find a local contractor who could put up a bond for a project of that scale," he said.
Asked where the manpower for the project will come from and if T&T has the necessary skills for the project, Nirmal Rampersad, one of directors Trinidad Dry Dock, said right now the National Training Agency and its programmes are turning out people with the relevant skills.
"The Government is taking the initiative in developing skills with NESC and other schools. Right now, there is an abundance of welders," he said.
Kristine Thompson, chairman of InvestTT, said project development is not for the "faint hearted."
"The incubation process is long and not usually a straight and narrow road. There are going to be many winds on the road, but our mandate is to help you along the way and to expedite the development process. Of course, it is a huge investment and it is an investment that will have significant environmental impact. Therefore, projects of that nature require a close working relationship with the Government in general. We will intervene as and when required to help the process," she said.
Thompson said this project fits well within the Government's strategic goal of developing the maritime sector.
"This will take another five or six years, but will bring benefit to the country," she said.
Environment
Responding to questions from the media, Moses said they do not anticipate having any "disruption" with regard to getting environmental clearance and opposition from environmental groups as with other projects.
"We will be using the process and helping Trinidad Dry Dock through the process. We think that is in the best interest of the country and project to ensure that it gets a clear certificate of clearance. With regard to a social impact assessment, that is apart from the environmental assessment and they will establish whether or not there is any elements that need to be mitigated as relates to the project in getting the environmental clearance," she said.
Mendez said they have met with all the stakeholders involved in the process.
"The EMA instituted a new phase in the whole environmental planning process and it is one in which even the terms of reference require the comments of all stakeholders. So that in getting to the stage of finalising our terms of reference, Trinidad Dry Dock reached out to 57 stakeholders. It included Members of Parliament, councillors, Wayne Kublalsingh, Jimmy Aboud. We wrote all of them asking for comments on the terms of reference. It also included the residents of Sea Lots," he said.
ETIENNE MENDEZ
A graduate in civil engineering (1973, McMaster University, Hamilton, Ontario, Canada), Mendez's 41-year career has been a mix of design engineering consultancy, client project management, project director, contractor's construction management and the owner of his own design/construct companies. Mendez served as a director for some eight years on the board of the Point Lisas Industrial Port Development Company (PLIPDECO) the largest industrial estate and port in T&T, with primary oversight responsibilities for its port and cargo handling operations. He has had two stints working in Government of T&T, first starting in 1975 at the Highways Division of the Ministry of Works, as a civil engineer, departing at the level of chief planning engineer in 1983, and from 2004 to 2010 at the Ministry of Community Development providing the technical direction for its community centres development programme. He is also a member of the advisory board of Trillium International School. His role at the Trinidad Dry Dock Company over the past ten years has been that of the primary technical and engineering consultant and board member. The entire front end engineering designs, all of the maritime sector industry research, the financial projections for the project and its operations, the development of its business plan, and most of the negotiations with Government has been under his portfolio of activities at TDDCL.