Global Ports Holding Head of Business Development in the Americas Colin Murphy.
PHILIPSBURG--“We are very interested in St. Maarten,” confirmed Global Ports Holding (GPH) Head of Business Development in the Americas Colin Murphy in an exclusive interview with The Daily Herald on Tuesday. GPH said it has had discussions with the Council of Ministers, Members of Parliament (MPs), and the St. Maarten Chamber of Commerce and Industry (COCI) to “take their temperature” on a private third-party operator managing Port St. Maarten.
GPH’s statements come a day after Port St. Maarten said in a press release that “for the long-term, 20-25 year period,” the port will issue a request for proposals (RFP) to “realise its long-term strategic goals of attracting a partner(s) which could comprise private port operators or cruise line(s).”
“Such a partnership would bring additional strategic expertise and capital, leading to mutual benefits for the port and the country overall,” said the port.
GPH is the world’s largest private operator of cruise ports. The company currently operates 18 cruise ports around the world, including Lisbon, Portugal; Barcelona, Spain; Venice, Italy; and Singapore.
The company has also been expanding in the Caribbean recently. In 2018, the company signed a 15-year concession to operate the cruise port in Havana, Cuba. This year the company signed a 30-year agreement to operate the cruise port in Antigua and Barbuda and, with a consortium of other partners, signed a 25-year agreement to operate Prince George Wharf and related areas at Nassau cruise port in the Bahamas to the tune of US $250 million. Nassau is the biggest cruise port in the world, handling 3.5 to four million passengers annually.
Additionally, GPH operates two cargo ports, namely Antalya in Turkey and the port of Adria in Montenegro.
According to Murphy, GPH cannot comment on the specifics of an offer until it sees an RFP from Port St. Maarten. However, he did confirm the company is interested in a concession for both the cruise and cargo port, adding that given Port St. Maarten’s debt profile this is the most sensible option.
In terms of capital investment, Murphy expects a St. Maarten agreement to be like the one the company inked with Nassau.
One part of a potential agreement would be infrastructural repairs and upgrades. One damaged cruise pier would need to be repaired and another cruise pier would be expanded to add two new berths. This would cost between $60 and $85 million. Additionally, the cargo pier would need its capacity increased and, with the addition of new cranes, this represents a $25 million investment.
A second part of a potential agreement would be debt servicing. GPH would commit to paying off Port St. Maarten’s outstanding debt, which Murphy estimates to be between $180 and $200 million.
In total, this would mean GPH is anticipating offering more than $250 million to operate Port St. Maarten.
Murphy reiterated that GPH does not claim a share in the port’s ownership. “We partner with destinations. We manage their ports on their behalf. So, we don’t own anything. We’re not buying anything. The ownership of the ports stays with the governments always,” he said.
Instead, the company would control all the commercial aspects of the port (including tariffs, mooring fees, and operating costs) for a specified period. At the end of the concession, the government can decide whether to renew the concession or resume the port’s management itself.
In this arrangement, the St. Maarten government would receive a revenue share of the port’s profits. When asked what percentage is usually returned to concession-issuing governments in these types of arrangements, Murphy did not specify a number, saying percentages depend on several factors, including the amount of the initial investment.
However, he did stress that, as a private company, GPH is seeking to “operate it [Port St. Maarten – Ed.] as appropriately as we can to maximise the return for us and for the government and the people of St. Maarten.” Murphy characterises it as a win-win situation, as the government gets rid of debt, has no operational expenses, and receives a revenue share.
“Our job is to get as many ships in here as we can and create as many jobs as we can … our job as your partner, hopefully, is to make it as profitable as we can for everybody,” said Murphy.
According to him, the future for St. Maarten is bright, if the country puts itself in position to take advantage of trends in the cruise industry. “All the ports are expanding because there are more ships on order than ever before; there is a whole wave of bigger and better new ships coming. There is an explosion in the cruise industry in traffic, but there is not an explosion of new berths.
“… Islands that are investing and expanding and improving are set to do extremely well. But if you’re not investing and improving and expanding, there’s a possibility you are going to be left behind. We believe that cruise berths are going to become increasingly valuable and that business is going to get better and better,” said Murphy.
Regarding the cruise ports GPH operates in the region, he said, “our model was very well appreciated by the destinations. They know they have got to invest; they know they have got to improve, but they don’t have the resources to do it. So, we come in and act as their partner. We provide the funding and the operational expertise so they [can] compete globally, not only with other ports in the Caribbean, but with ports around the world.”