Contact • Vol.16 No.1 2016
14 T&T’s Economic Downturn - Positive Through Entrepreneurial Lenses 18 Public/Private Partnerships as a formula for diversification 20 Case study: Villages as Businesses The Lopinot experience 24 La Brea Shipyard Development 26 What every business person should know
6 The time is now
28 Economic and Financial Statistics 30 Economic Outlook 32 Year end 2015 review
8 T&T Enterprise: to boldly invest where no one has invested before
36 Lower oil prices and T&T energy 38 Energy Statistics 48 Member Profile
10 Agriculture - More lies beneath the surface
52 Welcome to New Members 54 Advertisers
Editor: Halima Khan Editorial Board: Communications Committee: Robert Trestrail, Catherine Kumar, Hugh Ferreira, Anthony Agostini, Andrew Johnson, Dalia King, Michele Celestine, Marva Newton
12 Case study: The UpMarket Story
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La Brea Shipyard Development by Wilfred de Gannes, CEO, Shipbuilding & Repair Development Co. of T&T Ltd.
he recent Trinidad and Tobago Parliamentary debate that centred around the Motion, ‘Increase of Loan Ceiling under The Development Loans Act’ and tabled by the Minister of Finance and Member of Parliament the Honourable Colm Imbert, in the 7th Sitting, 11th Parliament in early December, 2015 points in the right direction as it is required for the much needed diversification for the economic survival of Trinidad and Tobago. One such diversification strategy involves the country’s thrust into the meaningful development and expansion of the maritime sectors, particularly Shipbuilding and Repair, both of which were equally highlighted in the respective September 2015 Election Manifestos of the two major political parties.
the House of Representatives and in the Senate mention that the Motion tabled will assist the current government Administration to honour contractual agreements already entered into. One of these signed agreements was the Design, Build and Finance of a United States Five hundred million dollar (USD500 Million) Shipyard development project at La Brea, South Western Trinidad which had been proposed by the Shipbuilding and Repair Development Company of Trinidad and Tobago Limited (SRDC), the commercial entity of the Cluster, since September, 2010. This large-scale industrial project, which has already been endorsed by both community residents and environmental activists alike, will permit the country additional opportunities to dry dock large ‘Panamax’ ocean-going ships, in a Graving Dock (A dry dock where the hulls of ships are repaired and maintained). This, together with the creation of a number of alongside repair berths to handle up to Aframax sized tanker ships (80,000-120,000 DWT) which frequent the southernmost regions, including the Caribbean Sea and are mainly utilized in the ocean transportation of crude oil between refineries, located in both The Bolivarian Republic of Venezuela and the United States of America. The Bolivarian Republic of Venezuela cannot be ignored when we speak of expanding Trinidad and Tobago’s maritime sector, as they presently have one of the larger, more established maritime Universities in the region, located in Vargas State and known as La Universidad Nacional Experimental Marítima del Caribe (UMC) together with a large fleet of Aframax tankers that assist in their crude oil exports. In 2014, The Bolivarian Republic of Venezuela was also the fourth largest supplier of imported crude oil to the United States, behind Canada, Saudi Arabia and Mexico, according to the United States Energy Information Administration (EIA). In December 2015, the SRDC with the kind assistance of its Stakeholders facilitated an inward visit by a Maritime Graduate from the UMC. This was the first visitor from The Bolivarian Republic of Venezuela and has also followed similarly inward sponsored visits by maritime related personnel from the United Kingdom in 2009 and the People’s Republic of China in 2012. With the construction and commencement of Shipyard operations at the new La Brea Shipyard site, expected to be completed in 2018 by China Harbor Engineering Company Limited (CHEC) and project financing arranged by the Trinidad and Tobago government and the Export-Import Bank of China, this also represents a tremendous opportunity for Trinidad and Tobago to earn large amounts of much needed foreign exchange. In fact, the SRDC has envisaged that this Shipyard may have to operate twenty-four hours-a-day, seven days a week, similar to the Republic of Singapore, undertaking both scheduled and emergency repairs of ocean-going ships, much in the same manner in which it has become a global maritime leader from its smaller island mass. The Republic of Singapore is calculated to be one-fifth the size of Trinidad and Tobago and where a ship movement (arrivals and departures) occurs at a rate of one ship every three minutes, approximately.
A country cannot realistically hope to achieve a reasonable measured outcome of diversification, if the government does not intend to support this developmental goal without the requisite financial investments. The Trinidad and Tobago Shipbuilding and Repair Cluster has always held this view, as was clearly stated in its ‘VISION’ Booklet, first published by Cluster Stakeholders, when the now Prime Minister was heading the Ministry of Trade & Industry, in 2008. In fact, it is understood the Honourable Prime Minister also took the time to visit the main Shipyards, located in his Diego Martine West constituency and situated along the sheltered North-western coastline of Shipbuilding and Repair is a globally competitive business undertaking, which requires astute management and a dedicated Trinidad. labour force. With this in mind, the La Brea Shipyard intends to The Trinidad and Tobago Shipbuilding and Repair Cluster operate using similar labour practices found in many established Stakeholders were elated to hear the Minister of Finance, in both Shipyards in North America, Europe and in the Middle-East,
Feature Contact • Vol.16 No.1 2016
where job opportunities are first advertised locally. Unfilled positions will then be advertised internationally. The Bolivarian Republic of Venezuela can possibly be one closely managed source for qualified employees, many of whom have gained decades of
experience from their petroleum industry, bearing in mind, the close geographical position to Trinidad and their large population of thirty-three million inhabitants. With the recent lifting of the 40-year crude oil ban by the United States Congress, together with the commissioning of the Cheniere Energy Sabine Pass Liquefied Natural Gas (LNG) Terminal, strategically located on the Gulf Coast of the United States of America, the timing of the announcement that our Government will continue with the decision to construct a world class Shipyard project in La Brea, Southwestern Trinidad is welcome. This will help eliminate the frequent protests from the residents of La Brea and environs, who are demanding well-paying jobs. A recent study undertaken by the United States Government Accountability Office (GAO) and the prediction made by their Department of Energy (DOE) points to the fact that in the next few years, the United States of America is expected to change from a net importer of natural gas to a net exporter, with the completion of Five large-scale United States liquefaction facilities – necessary for the conversion of natural gas to liquid natural gas (LNG). This change will require at least one hundred (100) new LNG carrier ships, once the five LNG liquefaction facilities are fully operationalised by their projected start-up date of 2020.
The La Brea Shipyard project can directly benefit from an increase in ship repairs required by these additional LNG carriers, moving their precious cargoes from the Gulf Coast, including Sabine Pass and Corpus Christi, Texas through the expanded Panama Canal en-route to Asian markets, such as Japan, Taiwan and the People’s Republic of China. It is anticipated that the commissioning of the third lock in Panama in May 2016, will make LNG ship voyages to Asia, some 8,600 kilometres shorter and will be able to accommodate ninety-two percent (92%) of the World’s LNG fleet or some five hundred and thirty-eight (538) LNG carriers. With the expansion of the much awaited Panama Canal coming into reality in May 2016, and the anticipated hemispheric increase of LNG exports from the United States of America and Point Fortin, Trinidad, both requiring additional LNG shipping capacity, the Shipbuilding and Repair sector looks very promising, and is well Maritime Graduate from La Universidad Nacional Experimental Marítima poised to be the premier diversification strategy for Trinidad and del Caribe (UMC) at Maritime Preservation (Trinidad) Shipyard Tobago, away from the energy sector.