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Socio-economic benefits to be gained from investing in the Ship repair and Shipbuilding industry TRINIDAD AND TOBAGO SHIPBUILDING AND REPAIR MARITIME CLUSTER

An Initiative of the Ministry of Trade and Industry ______________________________________________________________

TABLE OF CONTENTS…………………………………………………...…………………...… ii - iii LIST OF FIGURES AND TABLES ……………………………………………………………….… iv ACRONYMS AND ABBREVIATIONS………………………………………………...…….….. v - vi ACKNOWLEDGEMENT……………………………………………………………………….…..…vii

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TABLE OF CONTENTS Page 1.0

Executive Summary…………...………………………………………………..……………1

2.0

Background…………………………………………………………………………..………..2 2.1

Economic Rationale……………………………………………………………..……..3

2.2

Diversification……………………………………………………………………… …..7

2.3

Government’s Macro Economic Objective………..………………………………....8 2.3.1 Use of Energy Revenue Surplus………….…………………………………...8 2.3.2 Attracting Foreign Direct Investment..…………………………………………8 2.3.3 Educating the Labour Force…………………………………………………....8

3.0

4.0

5.0

International Maritime Developments……………………………………..…….………..9 3.1

Increased Economic Growth Impacting Positvely on Shipping………..…….……9

3.2

Increase In Shipyard Orders………………………………………………………...10

3.3

Ship-owners facing Dry dock Shortage…………………………………………….11

3.4

Expansion of the Panama Canal……………………………………………………12

Local Maritime Developments………………………………….………………………... 13 4.1

Increased Vessel Ownership by the Government…………………..…………… 13

4.2

Construction of New Coastal Developments……………………….…….….…….13

4.3

New Bidding Rounds for Exploration of Ultra-deepwater Blocks.….……………13

4.4

Establishment of the Essar Steel and Alutrint Metal Plants…………….……… 14

4.5

Increased Vessel Ownership by Local Maritime Companies.……..…………… 14

The Domestic Maritime Environment…………………………………………………... 15 5.1

Key Success factors for the Development of Ship repairs and Shipbuilding….. 16

5.2

Our Fundamental Advantage……………...………………………………………... 16

5.3

Fundamentals for Maintaining Competitive Advantages……...……….………… 16

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Upcoming Shipyard Developments – Trinidad and Tobago………….……………..17 6.1

Project Profile – Trinidad Dry Dock Company Limited…………….……………..18 6.1.1 Overview……………………………………………………….………………18 6.1.2 Socio-economic Benefits…………………………………….………………19 6.1.3 Construction Planning……………………………………….……………….20

6.2

Project Profile – T&T Advance Shipyard Park…………………………….……… 21 6.2.1 Overview……………………………………………………….…………….. 21 6.2.2 Short Listed Advance Shipyard Park Locations…...……...………22 6.2.3 Socio-economic Benefits…………………………………….………………23 6.2.4 Typical Shipbuilding Production Workflow to be Utilised…….…………..23 6.2.5 T&T Advance Shipyard Fast Facts…………………………………………24

7.0

Shipbuilding & Repair Development Company Trinidad and Tobago Limited..…25 7.1

Organizational Structure.…………………………………………..…...…………...25 7.1.1 S&R Committees………………………………………….…………………..25

7.2

Programme Expenditure……………………………………………..………………26

7.3

Proposed Budget Allocations………………………………………..………………27

8.0

Conclusion and Recommendation…………………………..………………….……… 28

9.0

List of Stakeholders………………………………………...…………...………………… 29

10.0

9.1

Government Ministries, Committees and State Agencies………….…………….29

9.2

Shipbuilding and Repair Cluster Leadership..……...…………..……………….…30

9.3

Shipbuilding and Repair Cluster Stakeholders………..…….…………………….31

Additional Information……………………………………………………..………………35

APPENDIX 1: Comparative S&R Developments – Brazil and Qatar………………...…….....36

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LIST OF FIGURES

Page

Figure 1

31,000 Voyages in the Vicinity of Trinidad and Tobago……………….….……….3

Figure 2

OSV Undergoing Scheduled Zinc Anode Replacement ………………...………...4

Figure 3

Expansion of the Panama Canal Will Add A Third Lock By 2014……………….12

Figure 4

Types of Vessels Registered in Trinidad and Tobago……………………………15

Figure 5

Trinidad Dry Dock Company to Build Shipyard off Sea Lots area………………19

Figure 6

Trinidad Dry Dock Company to Build Shipyard on Reclaimed Land…………....19

Figure 7

Overhead View of the Dry Docks to be Built off Sea Lots………………………..21

Figure 8

Advance Shipyard Park - Ship Repairs and Shipbuilding………………...……...20

Figure 9

Map of Trinidad Showing Possible Shipyard Park Locations….……...….……...22

Figure 10

Diagram showing Proposed Shipyard Production Workflow…………….……....23

Figure 11

Organizational Chart – Shipbuilding & Repair Development Co. T&T Ltd…..…25

Figure 12

The Atlântico Sul Shipyard Located in Suape, N.E. Brazil………………...……..37

Figure 13

President Luiz Inácio Lula da Silva of the Federative Republic of Brazil Visits Atlântico Sul Shipyard with Venezuelan President, Hugo Chávez…………….. 38

Figure 14

The Nakilat Facility Designed in accordance with Best International Practice…40

Figure 15

Nakilat Ship Repair Yard with Infrastructure, Dry docks, Quays, Buildings...….41

LIST OF TABLES Table 1

World Merchant Fleet by Ship Type………………………………………………….5

Table 2

New Orders for Standard Vessels Per Year …………...……………….…………..6

Table 3

International Monetary Fund Forecast 2006 – 2008……………………...……..…9

Table 4

Elsewhere in the World Shipbuilder’s Orderbooks…………….….….…..............10

Table 5

Liner Operators “TOP 10” – At January 1st 2008……………….………………...11

Table 6

Vessels Delivered / Ordered at Foreign Shipyards on behalf of GOTT……...…13

Table 7

Vessels Delivered / Ordered at Foreign Shipyards for Local Companies……...14

Table 8

Trinidad Shipyard Projects (2008 – 2013)………………….………………………17

Table 9

Programme Expenditure (FY2008-2011) Spreadsheet ……..…………………...26

Table 10

Brazil and Qatar Shipyard Projects (2009)………..………………..………..…….36

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ACRONYMS AND ABBREVIATIONS AHTS

Anchor Handler Tow Supply

APM

Arnold Peter Møller

APL

American President Lines Limited

ASCO

Aberdeen Service Company

BRS

Barry Rogliano Salles

BVT

Joint Venture between BAE Systems and VT Group

CEC

Certificate of Environmental Clearance

CGM

Compagnie Générale Maritime

CMA

Compagnie Maritime d'Affrètement

CO

Company

COSCO

China Ocean Shipping (Group) Company

CSCL

China Shipping Container Lines Company Limited

CSME

Caribbean Single Market Economy

dwt

Deadweight Tonnage

EIA

Environmental Impact Assessment

EMA

Environmental Management Authority

FY

Financial Year

GATE

Government Assistance for Tuition Expense

GDP

Gross Domestic Product

GOTT

Government of Trinidad and Tobago

Ha

Hectare

HC

Hydrocruiser Corporation

I&OCL

Inland & Offshore Contractors Limited

IFC

International Finance Centre

IMF

International Monetary Fund

LABIDCO

La Brea Industrial Estate

LNG

Liquified Natural Gas

M

Million

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MIDC

Maritime Industry Development Committee

MOWT

Ministry of Works and Transport

MTI

Ministry of Trade and Industry

NEC

National Energy Corporation of Trinidad and Tobago

NIDCO

National Infrastructure Development Company Limited

NYK

Nippon Yusen Kaisha

OSV

Offshore Supply Vessel

PATT

Port Authority of Trinidad and Tobago

PSV

Platform Supply Vessel

QTY

Quantity

S&R

Shipbuilding and Repair

T&T

Trinidad and Tobago

TT

Trinidad and Tobago

TLA

Trinidad Lake Asphalt

TTCG

Trinidad and Tobago Coast Guard

TTSR

Trinidad and Tobago Shipbuilding and Repair

U/C

Under Construction

USD

United States Dollar

UTT

University of Trinidad and Tobago

VLCC

Very Large Crude Carrier

vi August 2008


ACKNOWLEDGEMENTS The Trinidad and Tobago Shipbuilding and Repair Cluster would like to thank the Ministry of Trade and Industry for hosting cluster meetings and stakeholder forums. The Leadership team is especially grateful to Captain Rawle Baddaloo – MIDC Chairman and its committee members, Mr. Richard Ramsawak – MTI Industry Specialist and Ms. Rita Hansraj - Research Assistant for their support and assistance in the preparation of this report and to Mr. Michael Burke Chairman of the Board, Maritime Preservation Ltd., for providing valuable shipyard data. Our appreciation also extends to Mr. Etienne Mendez of the Trindad Dry Dock Company Limited. In addition, we are indebted to cluster stakeholders and maritime consultants Global Insight, BRS and MLTC, whom we consulted in preparation of this report on the socio-economic benefits to gained from investing in the domestic Ship Repair and Shipbuilding industry.

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Trinidad and Tobago Shipbuilding & Repair Maritime Cluster Socio-economic benefits to be gained from investing in the Ship Repair and Shipbuilding Industry

1.0 Executive Summary At the present time, Trinidad and Tobago has minimal capacity for the repair and conversion of ships or the construction of high value commercial vessels. Almost all of Trinidad and Tobago’s needs in these sectors were catered for by foreign shipyards which amounted to TT$3,380 billion for the acquisition of some thirty-three (33) vessels in the last two years. The loss of business to local industry is significant, and major opportunities to further develop and diversify the country’s industrial base are not being exploited. The SHIPBUILDING AND REPAIR DEVELOPMENT COMPANY OF TRINIDAD AND TOBAGO LIMITED is to be formalized in the 4th Quarter of 2008. The main purpose and primary responsibility will be the implementation of the Shipbuilding and Repair (S&R) Strategic Plan, outlined in its ‘VISION’ document formulated by industry stakeholders and consultants, while the Government of Trinidad and Tobago (GOTT) will provide funding and generally facilitate the overall development process. Programme expenditure over the initial 4 year development period (FY2008-2011) is estimated to be TT$889,310,000 consisting of the establishment of S&R Headquarters and Training Centre, Operating Expenditures, Marketing and Promotion activities (maritime trade shows and publications), S&R Cluster Development (financial grants / non-financial incentives) and the development of an Advance Shipyard Park for the repair and construction of ships >1,000 dwt. This report outlines some of the development plans and socio-economic benefits to be derived from investing in a vibrant domestic ship repair and shipbuilding sector. A significant investment programme is urgently required for Trinidad and Tobago to keep pace with the rest of the expanding maritime world and for our nation to reach its developed country status by the year 2020.

Wilfred de Gannes Deputy Leader of the Shipbuilding and Repair Cluster

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2.0 Background This concept and strategy has come about by way of three main reasons: 1) economic rationale driven by recent local and international maritime developments; 2) the need to aggressively diversify the local economy from the energy sector and 3) government’s macro-economic policy.

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2.1 Economic Rationale The ideal marine conditions in the Gulf of Paria make it virtually perfect for the maritime industry to operate a safe vessel anchorage and sheltered base for the establishment of a vibrant ship repair and shipbuilding industry. Trinidad & Tobago’s strategic location in relation to North America – Europe - Africa and the Panama Canal, provides a captive market for ship repairs. Trinidad is home to many world-scale industrial plants that export bulk commodities of various types using a wide range of shipping to transport these cargoes. Commodities include Trinidad Lake Asphalt (TLA), Ammonia, Urea, Methanol, Steel billets, Wire rods, as well as Liquified Natural Gas (LNG) throughout the western hemisphere and Europe. North-South Trade along the West Atlantic shipping lanes also generates approximately 31,000 voyages per annum of vessels passing within 10 nautical miles of Trinidad & Tobago, or 30 nautical miles from Port-of-Spain. Refer to Figure 1 below. FIGURE 1: 31,000 VOYAGES IN THE VICINITY OF TRINIDAD AND TOBAGO

Source: Trinidad Dry Dock Company Limited.

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Trinidad and Tobago Shipbuilding & Repair Maritime Cluster Socio-economic benefits to be gained from investing in the Ship Repair and Shipbuilding Industry

The type and deadweight size of vessels identified by the Trinidad and Tobago Shipbuilding and Repair Cluster, as the target market for ship repairs, includes Terminal Tugs, Ferries, Barges, Platform Supply Vessels (PSVâ&#x20AC;&#x2122;s) and Anchor Handler Tow Supply (AHTS) ships (<5,000 dwt) which also comprise the third largest number of vessels that make up the world merchant fleet. (Refer to Table 1, Page 5) These vessels are also very prevalent in our territorial waters, as they play a significant role in the port, ship lightering, offshore oil and gas exploration, and inter-isle passenger transport. Existing ship repair facilities in Trinidad are fully booked with scheduled drydocking of these vessels. Unsatisfactory waiting periods range from 3 to 6 months for an available shipyard slot. FIGURE 2: OSV UNDERGOING SCHEDULED ZINC ANODE REPLACEMENT.

Source: Maritime Preservation Limited (Trinidad Shipyard)

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Trinidad and Tobago Shipbuilding & Repair Maritime Cluster Socio-economic benefits to be gained from investing in the Ship Repair and Shipbuilding Industry

TABLE 1: WORLD MERCHANT FLEET BY SHIP TYPE

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Shipbuilding is a natural extension to ship repairs and provides the shipyard the opportunity to raise its level of competency and allows a higher margin of profitability. Modern shipbuilding methods also afford easier construction and fast delivery times. Demand for shipbuilding products has exploded in the last few years. In 2007 more than 300 million dwt of new orders (4,900 ships) were placed in shipyards. This compares to 117 dwt million in 2003. The world orderbook is growing rapidly and has risen in just twelve months from 345 million dwt to more than 526 million dwt. This represents close to 50% of the world fleet (a combined total of 1.1 billion dwt). Annual world shipyard production has now reached about 90 million dwt (2,300 ships) compared to 55 million dwt in 2003. The orderbook is spread out over several years and already some Japanese shipyards are talking about deliveries in 2013. Refer to Table 2 below. TABLE 2: NEW ORDERS FOR STANDARD VESSELS PER YEAR (end 2007)

Source: BRS-Alphaliner

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Trinidad and Tobago Shipbuilding & Repair Maritime Cluster Socio-economic benefits to be gained from investing in the Ship Repair and Shipbuilding Industry

2.2 Diversification Trinidad and Tobago has become known for its well-established, energy based economy, and the country derives most of its revenue from this sector. However, Government recognizes that energy resources are finite and in order to achieve long-term, sustainable growth and development, the country must aggressively diversify its economy. In 2004, a strategic plan was created by industry operators and technical specialists at the Ministry of Trade and Industry, to guide the long term development of the merchant marine industry and in 2006, Cabinet appointed a Maritime Industry Development Committee (MIDC) to oversee implementation of the plan and to develop strategies for the establishment of a viable merchant marine industry. It has identified the Ship Repair and Shipbuilding Industry as â&#x20AC;&#x153;one of the targeted sectors in the Governmentâ&#x20AC;&#x2122;s thrust to diversify the economy of Trinidad and Tobagoâ&#x20AC;? from the energy sector, much in the same way as other gas and petroleum exporting countries have already done, such as Brazil, Qatar, Oman and Norway.

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2.3 Governmentâ&#x20AC;&#x2122;s Macro Economic Objective The Government of the Republic of Trinidad and Tobago has embarked on a development agenda to transform the country into a developed nation by the year 2020. The driving force behind these developments is to bring prosperity and a higher quality of life to every individual family and community across the country. 2.31. USE OF ENERGY REVENUE SURPLUS Diversification efforts are presently underway utilizing the windfall energy revenues in attempt to create a developed nation with a more diversified structure of production with a view of reducing the dependency on the energy sector and developing a viable non-energy sector able to compete in the global marketplace. This development will take some time and efforts must be made to ensure the proper utilization of revenues from the energy sector. 2.3.2. ATTRACTING FOREIGN DIRECT INVESTMENT Over the past five years Trinidad and Tobagoâ&#x20AC;&#x2122;s Foreign Direct Investment (FDI) has averaged US$600 million (net) per annum. Foreign investment primarily fuels the energy and downstream manufacturing sectors in Trinidad and Tobago with large investors inclusive of Cantrex, Arcelor Mittal and Essar Steel, A recent visit to Trinidad and Tobago by a delegation from International Enterprises (IE) Singapore, a lead agency under the Singapore Ministry of Trade and Industry which spearheads the development of Singapore's external economic wing commented on the need to make Trinidad and Tobago more attractive to foreign investment. 2.3.3. FURTHER EDUCATING THE LABOUR FORCE The University of Trinidad and Tobago (UTT) Campus for Maritime Studies in Chaguaramas was officially inaugurated in September 2007. Maritime degree courses presently offered include BSc. Nautical Studies and MSc. Maritime Management. Ship Engineer and Deckhand courses are also available. Assistance programmes comprising of the following are being offered to assist those in financial need, ensuring high quality maritime training is available to eligible students. - Government Assistance for Tuition Expense programmes (GATE) - Higher Education Loan and Scholarship programmes.

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3.0 International Maritime Developments 3.1 INCREASED ECONOMIC GROWTH IMPACTING POSITIVELY ON SHIPPING The world economy grew by 4.9% in 2007, against 5.0% in 2006. Commercial trade volumes have been sustained and according to the IMF increased again by 6.6% compared to 9.2% in 2006. There is no doubt that the world economy and the rapid development of developing countries with their double-digit growth, has contributed to the amazing boom in marine transport and shipbuilding. Refer to Table 3 below.

2006 2007 2008

TABLE 3: IMF FORECAST 2006 - 2008 (AS % OF GDP) World USA Japan Euro zone 5.0 2.9 2.4 2.8 4.9 2.2 1.9 2.6 4.1 1.5 1.5 1.6

China 11.1 11.4 10.0

Source: IMF – Jan 2008

Approximately 7,000 million tonnes of cargo, equal to approximately 80% of the world’s commodities, is transported by sea. Approximately, 90 % of the seaborne transport comprises agricultural products, raw material (i.e. steel, etc.) and energy products such as oil, oil products and coal. Without shipping the import and export of goods on the scale necessary for the modern world would not be possible. Seaborne trade continues to expand, bringing benefits for consumers across the world through competitive freight costs, in today’s world of high energy prices. Thanks to the growing efficiency of shipping as a mode of transport and increased economic liberalisation, the prospects for the industry's further growth continue to be strong. At present there are around 50,000 merchant ships trading internationally, transporting every kind of cargo. The world fleet is registered in over 150 nations, and manned by over a million seafarers of virtually every nationality.

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3.2 INCREASE IN SHIPYARD ORDERS Nearly 5,400 ships are on order worldwide, including tankers, container ships, bulk carriers and gas transporters. The hulls on order in the shipyards are equivalent to 28 per cent of the world's current merchant shipping fleet. As mentioned previously, this growth is being driven by a sharp upsurge in world trade, a result of globalization. The explosive increase in worldwide shipyard orders are also significant to several countries relatively new to large-scale shipbuilding namely the Philippines, Taiwan, Vietnam, India and Brazil, as seen in Table 4. TABLE 4: ELSWHERE IN THE WORLD SHIPBUILDERâ&#x20AC;&#x2122;S ORDERBOOKS (based on firm orders)

Source: BRS-Alphaliner

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Trinidad and Tobago Shipbuilding & Repair Maritime Cluster Socio-economic benefits to be gained from investing in the Ship Repair and Shipbuilding Industry

3.3 SHIP-OWNERS FACING DRY DOCK SHORTAGE Several large shipping corporations are joining forces with new and existing dry dock facilities to head off a potential dry-docking capacity crunch as owners take delivery of mega post-panamax containerships and similar sized cruise ship vessels. Owners face future problems finding available facilities both large enough and in the right geographic location. Carnival Cruise Lines, CMA CGM, Holland America Line, A.P. Møller Maersk Line, Mediterranean Shipping Company (MSC) and Royal Caribbean International are some of the names behind orders for these mega ships. Refer to Table 5 below. TABLE 5: LINER OPERATORS “TOP 10” – AT JANUARY 1ST 2008

Source: AXS-Alphaliner TOP 100 2008

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3.4 EXPANSION OF THE PANAMA CANAL Global development and economic growth lead by countries including China and India are impacting positively on shipping. This has given rise to severe bottlenecking, hence the decision to expand the Panama Canal to accommodate the surge in demand. During 2007, fourteen thousand, seven hundred and twenty one (14,721) Ocean Going Vessels passed through the Panama Canal. This figure would have increased since this period. FIGURE 3: EXPANSION OF THE PANAMA CANAL WILL ADD A THIRD LOCK BY 2014

Source: Panama Canal Authority

The Expansion of the Panama Canal will add a third lock and the shipping lanes will be widened by 2014, one hundred years after the Canal opened to shipping traffic. This expansion is expected to cost approximately US$$5.250 Billion. Additionally, post panamax vessels also comprise a growing proportion of the shipping fleet, and the Canalâ&#x20AC;&#x2122;s expansion reflects the need to accommodate these larger size ships.

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4.0 Local Maritime Developments 4.1 INCREASED VESSEL OWNERSHIP BY THE GOVERNMENT Acquisition of twenty-two (22) vessels <1,000 dwt at a shipyard price of TT$3,310 billion. Vessels already delivered / ordered at foreign shipyards on behalf of the Government of Trinidad and Tobago (GOTT) within the last two (2) years, include: TABLE 6: VESSELS DELIVERED / ORDERED AT FOREIGN SHIPYARDS ON BEHALF OF GOTT. QTY SHIPYARD

1 1 2 3 4 5 6

DAMEN DAMEN INCAT BVT HC DAMEN AUSTAL

APPLICATION

AGENCY

STATUS

Terminal Tug Fast Crew Supplier Inter-Isle Fast Ferries Offshore Patrol Vessels Coastal Water-Taxis Terminal Tug Offshore Patrol Vessels

PETROTRIN PETROTRIN PATT TTCG NIDCO NEC TTCG

NEW BUILT NEW BUILT USED U/C USED NEW BUILT U/C

COST TT

$30 M $15 M $422 M $2,100 M $252 M $100 M $391 M

4.2 CONSTRUCTION OF NEW COASTAL DEVELOPMENTS Fuelled by the rapid growth of Trinidad’s energy sector, particularly as it relates to gas production, sites for three new industrial estates have been identified for development by the Government-owned National Energy Corporation (NEC). The three selected sites are all along the island’s west coast because of its sheltered nature. They are: Point Lisas Extension (1,400 Hectares), Cap-de-Ville Extension (530 Hectares), Oropuche Bank (1,400 Hectares). Plans include the re-location of the Port of Port-of-Spain to Sea-Lots (East) and the expansion and further dredging of Galeota Port to accommodate small Handy size vessels.

4.3 NEW BIDDING ROUNDS FOR EXPLORATION OF ULTRA-DEEPWATER BLOCKS Trinidad and Tobago is expected to conduct a bidding round later this year. The purpose of the round, which will be the country's third ever, is to bolster diminishing reserves, in particular natural gas. Four blocks will be offered, two off the eastern coast and two off the northern coast. Despite the complete lack of success of the Trinidad Deep Atlantic Area offering, Trinidad and Tobago will make another attempt at attracting interest in the ultradeepwater blocks.

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4.4 ESTABLISHMENT OF THE ESSAR STEEL AND ALUTRINT METAL PLANTS Both these downstream manufacturing plants will provide a ready supply of raw materials, namely steel and aluminium products, used in local manufacturing and in the ship repair and shipbuilding industries. 4.5 INCREASED VESSEL OWNERSHIP BY LOCAL MARITIME COMPANIES Acquisition of some eleven (11) vessels <1,000 dwt at a shipyard price of TT$70 Million. Vessels already delivered / ordered at foreign shipyards by companies registered in Trinidad and Tobago within the last two (2) years, includes the following to be used primarily to support the offshore energy sector. TABLE 7: VESSELS DELIVERED / ORDERED AT FOREIGN SHIPYARDS FOR LOCAL COMPANIES QTY

SHIPYARD

APPLICATION

COMPANY

STATUS

1 2 1 1 2 1

DAMEN LOREAUVILLE, LA SWIFTSHIPS BOLLINGER OFFSHORE TRAWLERS LA FORCE SHIPYARD

Terminal Tug Crew Transport Crew Transport OSV OSV OSV

AR SINGH I&OCL I&OCL I&OCL I&OCL I&OCL

NEW BUILT USED USED USED USED USED

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COST TT

$25 M $2 M $1 M $18 M $10 M $14 M

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5.0 The Domestic Maritime Environment The Domestic Maritime Environment comprises vessels owned by locally registered companies, both private and government-owned involved in various commercial maritime related industries. Figure 4 below, indicates that vessels owned and registered in Trinidad and Tobago are primarily < 5,000 DWT and includes Lift Barges, Water Carriers, Passenger Ferries, Terminal Tugs, Barges (Transport and Construction), Offshore Support Vessels and Fishing Vessels. This line-up falls within the target market for ship repairs and new shipbuilding, identified by industry stakeholders and consultants (Refer to Page 4, S&R Vision booklet). Increasing the local shipyard capacity and capabilities to adequately service these vessels within our country will save the shipowners from having to go abroad for expensive repairs, thereby reducing turnaround time and saving valuable foreign exchange. FIGURE 4: TYPES OF VESSELS REGISTERED IN TRINIDAD AND TOBAGO.

Source: Maritime Services Division - MOWT.

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5.1 KEY SUCCESS FACTORS FOR THE DEVELOPMENT OF SHIP REPAIR AND SHIPBUILDING - GOTT: goal to diversify the economy and expand the domestic maritime sector. - GOTT: goal to increase involvement in the local ship ownership sector. - Willingness of stakeholders / nationals of Trinidad and Tobago to be involved at all levels in the domestic ship repair and shipbuilding Industry, as seen by enormous interest in the Maritime Stakeholders Forum (March 2008) and the Maritime Mentorship Youth Programme (July - August 2008). - Availability of locally produced, competitively priced ship repair and shipbuilding materials: Essar Steel and Alutrint metal plants. - Availability of locally trained / certified maritime professionals: UTT Maritime Campus.

5.2 OUR FUNDAMENTAL ADVANTAGE - Existing ship repair business. - Soon to be established IFC International Finance Centre at the Port-of-Spain Waterfront - Existing links with relevant maritime authorities and regulatory bodies. - Below active hurricane belt. - Long history in weld fabrication.

5.3 FUNDAMENTALS FOR MAINTAINING COMPETITIVE ADVANTAGES - Use of standardized ship designs for the construction of new vessels. - Use of the latest technologies in ship repair and in the shipbuilding process. - On-going human resource training and development for all industry stakeholders. - Innovative financial solutions, as a result of the establishment of a vibrant International Finance Centre (IFC) at Port-of-Spain.

For further details kindly refer to Pages 11, S&R â&#x20AC;&#x2DC;VISIONâ&#x20AC;&#x2122; booklet.

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6.0 Upcoming Shipyard Developments -Trinidad and Tobago TABLE 8: TRINIDAD SHIPYARD PROJECTS (2008 - 2013)

LOCATION OF SHIPYARD NAME OF SHIPYARD START OF OPERATIONS PROJECT TYPE TYPE OF SHIPYARD SHIPYARD AREA NO. OF FLOATING DRY DOCK PROPOSED NO. OF GRAVING DOCKS PROPOSED SEA SIDE CRADLES / TRAVELIFTS SERVICE GUIDE JETTIES / WHARF MAX. SIZE OF SHIPS TO BE DRY DOCKED MAX. LENGTH OF SHIPS TO BE DRY DOCKED TYPE OF VESSELS TO BE SERVICED NO. OF PERSONS TO BE EMPLOYED ESTIMATED TOTAL PROJECT COST TT$ ESTIMATED ANNUAL TURNOVER TT$ Notes

TRINIDAD Caribbean Dockyard & Eng Q4 2008 Re-activation of Drydock Drydocking / floating repairs 10 Ha. (25 Acres) 1 1 YES 23,000 dwt 220 Metres OSV’s, AHTS, RIG 400 Data unavailable at present $150,000,000 Removal of obsolete Floating drydock being undertaken. Replacement Floating drydock to be commissioned in Q4 2008

TRINIDAD Maritime Preservation Ltd. 2011 Re-location of Shipyard Drydocking / floating repairs 1.2 Ha. (3 Acres) 1 1 YES 5,000 dwt 80 Metres TUGS, OSVs, FERRIES 200 $120,000,000 $72,000,000 5,000 dwt Floating drydock design being undertaken. New re-location site identified and presently being finalized.

LOCATION OF SHIPYARD NAME OF SHIPYARD START OF SHIPYARD OPERATIONS PROJECT TYPE TYPE OF SHIPYARD SHIPYARD AREA NO. OF FLOATING DRY DOCKS PROPOSED NO. OF GRAVING DOCKS PROPOSED SEA SIDE CRADLES / TRAVELIFTS SERVICE GUIDE JETTIES / WHARF MAX. SIZE OF SHIPS TO BE DRY DOCKED MAX. LENGTH OF SHIPS TO BE DRY DOCKED PRIMARY TYPE OF VESSELS TO BE NUMBER OF PERSONS TO BE EMPLOYED ESTIMATED TOTAL PROJECT COST TT$ ESTIMATED ANNUAL TURNOVER TT$ Notes

TRINIDAD Trinidad Dry Dock Co. Ltd. 2013 New Development Drydocking / floating repairs 58 Ha. (143 Acres) 5 4 YES 320,000 dwt 380 Metres POST PANAMAX, VLCC’S 5,000 $5,000,000,000 $756,000,000

TRINIDAD T&T Advance Shipyard 2013 New Development Repairs & Newbuilding 40+ Ha. (100+ Acres) 6 2 6 YES 5,000 dwt 150 Metres OSVs, AHTS, FERRIES 1,000 $800,000,000 $430,000,000

Application for project CEC from the EMA being undertaken

Shipyard locations short listed. (Refer Page 22)

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6.1 Project Profile â&#x20AC;&#x201C; Trinidad Dry Dock Company Limited 6.1.1. OVERVIEW FIGURE 5: TRINIDAD DRY DOCK TO BUILD SHIPYARD OFF SEA LOTS AREA.

The proposed TT$5 Billion Sullivan Island, to be constructed on 58 Hectares (143 Acres) of reclaimed land, strategically located on the shallow inland bank of the Gulf and will be home to one of the largest graving dock facilities in the world. It is one of the most ambitious projects ever undertaken in the Caribbean Region, outside of the energy sector and will be an engineering feat. Internationally, the project is beginning to attract the attention of the engineering world, and although comparable to mega projects such as the Kansai Island Airport off the coast of Japan, and the Palm Island Reclamation Project in the United Arab Emirates, Sullivan Island will be a built community that is buttressed by industrial, commercial and tourism activity. Sullivan Island will consist of the following ship repair facilities: - 5 Graving Docks for ships 2,000 dwt to 320,000 dwt, and up to 380m in length. - 4 Sea Side Cradles. - 5 Service / Guide Jetties for wet berthing of ships.

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6.1.2. SOCIO-ECONOMIC BENEFITS The Port of Spain Dry Docks is envisaged to have the capacity to create and provide 3,500 Construction related employment opportunities, during its five (5) year construction phase. More importantly, this project will provide an estimated 5,000 permanent jobs in the Ship Repair Sector, with an associated 7,500 jobs in the associated Services Sector. There will be a meaningful inclusion of the female component of the labour force. Therefore, 12,500 permanent and high paying job opportunities for citizens will be created. The location of the Port of Spain Dry Docks, in close proximity to three disadvantaged Communities, viz., Sea Lots, Beetham Gardens and Laventille, could provide a significant Socio-Economic stimulus, which would contribute significantly to the enhancement of the quality of lives and the lifting of the standard of living in these communities. The attendant reduction in the levels of undesirable criminal activity, as well as general improvement in all of the social indicators in these communities, could be a very real beneficial consequence. The proposed location of Sullivan Island, and its Access Residential Causeway, will lead to the general enhancement of an area that is not now used for any activity, being too shallow to permit shipping and too inaccessible to encourage any other type of commercial or recreational activity. FIGURE 6: TRINIDAD DRY DOCK TO BUILD SHIPYARD ON RECLAIMED LAND.

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6.1.3 CONSTRUCTION PLANNING FIGURE 7: OVERHEAD OF THE TRINIDAD DRY DOCKS TO BE BUILT OFF SEA LOTS

Fill for the creation of Sullivan Island will come from dredging of the Turning Basin. Equipment for dredging is already in Trinidad and Tobago, and can be supplemented at short notice. Equipment for construction and the Dry Dock Operations will largely be sourced overseas and no constraints are envisaged, particularly given the three to five (5) year lead times for acquisition. Skilled labour for construction (estimated at 3,500 persons), is not envisaged to be a major constraint, given the recently established Caribbean Single Market Economy (CSME), and Trinidad and Tobago’s maturity in the Construction Sector. Skilled labour for Dry Dock Operations will similarly be sourced both locally and overseas. An apprenticeship training scheme whereby nationals from the CSME will be sent overseas for training in Dry Dock Operations is expected to yield at least 33% (2,500 personnel) of the Dry Dock’s total skilled labour requirement (7,500 personnel) within three (3) years of start of construction of the facility. The Trinidad Dry Dock Company has applied to the Environmental Management Authority of Trinidad and Tobago, for a Certificate of Environmental Clearance (CEC), to begin construction of Sullivan Island. For further information refer to ‘TRINIDAD SHIPBUILDER AND REPAIR NEWS’ April 2008 Issue #7 Pages 8 -13.

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6.2 Project Profile â&#x20AC;&#x201C; T&T Advance Shipyard Park 6.2.1 OVERVIEW The Advance Shipyard Park will be an integral part of Trinidad and Tobagoâ&#x20AC;&#x2122;s expanding, ship repair and shipbuilding industry and will be a phased project undertaking of the Shipbuilding and Repair Development Company Trinidad and Tobago Limited. This marine complex will lead the region in the repair of vessels < 5,000 dwt . The Advance Shipyard Park will also excel in building deep sea multipurpose fishing vessels, mega yachts, terminal tug boats, barges, ferries and offshore supply vessels primarily for the export market, thereby earning valuable foreign currencies. The Advance Shipyard Park will be approximately 40 Hectares (100 Acres) in area extending from the Common User Facility to the on-site Administration and Employee Residential Facility. The Common User Facility will be developed to accommodate a growing ship repair and shipbuilding industry, and shall be home to six (6) primary ship repair / shipbuilding firms and many other smaller companies servicing vessels in the 24 to 150 Metre range. FIGURE 8: ADVANCE SHIPYARD PARK - SHIP REPAIRS AND SHIPBUILDING.

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6.2.2. SHORT LISTED ADVANCE SHIPYARD PARK LOCATIONS

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FIGURE 9: MAP OF TRINIDAD SHOWING POSSIBLE SHIPYARD PARK LOCATIONS

Source: Google Earth

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6.2.3. SOCIO-ECONOMIC BENEFITS Present demand for ship repairs and shipbuilding products in Trinidad and Tobago is estimated to be worth around TT$1.7 billion per annum. This comprises approximately TT$1.6 billion for vessels (primarily commercial workboats, fast ferries, offshore patrol vessels) and approximately $100 million per annum for repairs and maintenance. The shipyard sector with the implementation of the upcoming four (4) shipyard projects will directly employ over 4,000 people and a further 5,000 indirect jobs in the support sector. The Government of Trinidad and Tobago needs to adequately support and strategically position the Shipbuilding and Repair Development Company Trinidad and Tobago Limited to take advantage of the significant demand for Ship Repairs and fabrication of new vessels and equipment for the regional and international maritime markets. Establishment of the Advance Shipyard Park and support facilities will be a testament to global recognition of Trinidad and Tobago's Ship Repair and Shipbuilding prowess and sheer ability in maritime support, similar to what has already been achieved in offshore platform fabrication at the La Brea Industrial Estate (LABIDCO) operated by the National Energy Corporation (NEC). 6.2.4. TYPICAL SHIPBUILDING PRODUCTION WORKFLOW TO BE UTILISED 1. Steel Storage. 2. Steel Cutting. 3. Sub Assembly. 4. Block Assembly. 5. Painting Halls. 6. Outfitting Shops.

7. Pre-outfitting. 8. Grand Block Assembly. 9. Dock Facilities. 10. Outfitting Wharf. 11. Sea trials.

FIGURE 10: DIAGRAM SHOWING PROPOSED SHIPYARD PRODUCTION WORKFLOW

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6.2.5 T&T ADVANCE SHIPYARD PARK FAST FACTS Home to six (6) primary ship repair / shipbuilding firms. Shipyard location to be approximately 40 Hectares (100 acres) in area includes the Common User Facility and on-site Administration and Employee Residential Facility. The Advance Shipyard Park will formulate a phased development strategy, in close collaboration with ship repair and shipbuilding stakeholders, for the establishment of facilities for the maintenance and construction of marine vessels. Ship Repair and Shipbuilding Training Centre to be established on-site to assist unskilled, semi-skilled and qualified nationals of Trinidad and Tobago to learn and keep up to date with the latest ship repair and shipbuilding technologies available. On-site practical training programmes will supplement the Distance Learning Programme (DLP) utilizing the latest computer learning technologies. Refer to Page 18, S&R ‘VISION’ booklet. Linkages will be made with several local training institutions including, UTT Maritime Campus, The University of the West Indies, Metal Industries Company Limited. Vessels to be repaired and fabricated include deep sea multipurpose fishing vessels, mega yachts, terminal tugs, barges, ferries and offshore supply vessels for local and export markets in the 24 to 150 metre range. Refer to Pages 4-8, S&R ‘VISION’ booklet. Development of the Advance Shipyard Park would create a “multiplier effect” with the establishment of a wide range of local spin-off industries. Refer to Page 12, S&R ‘VISION’ booklet. Ninety-five (95) per cent of vessels will be built for export markets, thereby earning valuable foreign exchange.

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7.0 Shipbuilding & Repair Development Company T&T Ltd. 7.1

ORGANIZATIONAL STRUCTURE FIGURE 11: ORGANIZATIONAL CHART

7.1.1. S&R COMMITTEES: The Board of the Shipbuilding and Repair Development Company will establish Committees that leverage the expertise of industry experts to enhance networking and knowledge sharing activity between S&R Stakeholders. Committee meetings are open to all Stakeholders, and those who take an active, dedicated role to committee work are recognized as industry and committee leaders. Committees to be established include Communications Committee and Human Resource Committee. Communications Committee which will be formed to address improving the flow of communications to and from the industry Stakeholders. The committee takes a holistic look at all the methods of sharing information with members with a strong focus on the effective utilization of the Internet and the ‘TRINIDAD AND TOBAGO SHIPBUILDER & REPAIR NEWS’ monthly e-newsletter and our ‘ANCHOR’ print quarterly magazine. Human Resources Committee which shall address issues of common concern in the areas of personnel administration and human resources management by means of presentations by guest speakers and through the shared experience and input of Committee members. Page 25 of 41

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7.2 Programme Expenditure The Proposed budget over the initial 4 year development period (FY2008-2011) is estimated to be TT$889,310,000. This funding is necessary to achieve organizational goals outlined over this period of development. Refer to pages 25-27 in the S&R ‘VISION’ booklet. Expenditure consists of the establishment of S&R Headquarters and Training Centre, Operating Expenditures, Public Relations and Educational activities (maritime trade shows, seminars and publications), S&R Cluster Development (financial grants / non-financial incentives) to increase domestic shipyard capacity, including the development of an Advance Shipyard Park for the repair and construction of ships >1,000 dwt. TABLE 9: PROGRAMME EXPENDITURE (FY2008-2011) SPREADSHEET DESCRIPTION SHIPBUILDING & REPAIR DEVELOPMENT COMPANY TRINIDAD & TOBAGO LIMITED

FY 2008 $69,734

COSTING FY 2009 $389,868

TT$ 000 FY 2010 $349,868

FY 2011 $79,839

$1,152 $389 $2,754 $2,882

$1,152 $389 20

$1,152 $389 20

$1,152 $389 20

$487 $3,078 $3,600

$487 $3,078 $3,600

$487 $3,078 $3,600

$487 $3,078 $3,600

$3,000

$3,000

$3,000

$3,000

$1,800

$1,800

$1,800

$1,800

MICRO SHIP BUILDING & SHIP REPAIR CLUSTER DEVELOPMENT $476,250 PIONEER SHIPYARDS GRANTS $71,436 SERVICE SUB-SECTOR GRANTS 23,812 $7,143 BUSINESS FEASIBILITY DEVELOPMENT GRANTS 2,381 $4,761 BUSINESS DEVELOPMENT GRANTS 1,587 $11,250 NAVAL ARCHITECT FEES FOR STANDARDIZED SHIP $2,812 DESIGN & BUILDING PLANS S&R LOW INTEREST LOAN FACILITY / GOVERNMENT GUARANTEE (BDCL)

285,750 23,812 2,381 1,587 $2,812

190,500 23,812 2,381 1,587 $2,813

$2,813

PERIOD FY2008-11 $889,310

OFFICE ACCOMMODATION & TRAINING CENTER $4,608 CLASS 'A' UNFURNISHED OFFICE RENTAL $1,556 OFFICE & BUILDING MAINTENANCE $2,754 OFFICE OUTFITTING $2,942 MOTOR VEHICLES, OFFICE & KICHENETTE EQUIPMENT, IT / H & S OPERATING EXPENDITURES $1,948 UTILITIES, OFFICE CONSUMABLES, WEBSITE $12,312 SALARIES & WAGES, NIS CONTRIBUTIONS $14,400 TRAINING & HUMAN RESOURCE DEVELOPMENT SHIP BUILDING & SHIP REPAIR MARKETING & PROMOTION $12,000 T&T SHIPBUILDING & REPAIR - ANNUAL MARITIME EXHIBITION / CONFERENCE $7,200 PRINT & DISTRIBUTE S&R MAGAZINES, BOOKLETS

WORKING CAPITAL FACILITY - (USD$5,000,000) ADVANCE SHIPYARD DEVELOPMENT

$158,750

-

-

95,250

63,500

FEED, SHIPYARD LAYOUT CONSULTANCY ACQUISITION OF MAIN SPECIALIZED SHIPYARD EQUIPMENT (2 YEAR LEAD TIME)

$60,000 $40,000

$20,000 -

$20,000 $40,000

$20,000 -

STB INSTALL

KEY: BDCL = BUSINESS DEVELOPMENT COMPANY LIMITED FEED = FRONT END ENGINEERING AND DESIGN FY = FINANCIAL YEAR NIS = NATIONAL INSURANCE BOARD IT = INTERNET TECHNOLOGY H & S = HARDWARE & SOFTWARE STB = START TO BUILD

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Proposed Budget Allocations The majority of funding is to be directed towards S&R Cluster Development (84%), which consists of S&R Development Grants and Low interest Shipyard Loans required to increase ship repair and shipbuilding capacity within Trinidad and Tobago. Refer to Page 25, S&R ‘VISION’ booklet. The development of an Advance Shipyard Park (11%) for the repair and construction of ships >1,000 dwt. Refer to Page 26 in the S&R ‘VISION’ booklet. FIGURE 12: PROGRAMME EXPENDITURE (FY2008-2011) PIE CHART

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Conclusion and Recommendation The current situation with respect to further development of the Ship Repair and Shipbuilding industry is serious and deserves consideration by the government. First, the domestic Ship Repair industry contributes more than TT$100 million to our economy each year and generates more than 350 direct jobs and provides a “multiplier effect” for other local industries in the supply chain. Marine industries have an Economic Generation Factor of 5:1, fueling local economies by the creation of expanded job opportunities and driving international trade meaning that, for every dollar spent, a further five dollars of economic benefits are created. Therefore a TT$5 billion project like the Trinidad Dry Dock project to be established in 2013 at Sea Lots would add a further TT$25 billion benefit to the Trinidad and Tobago economy. Third, maritime traffic in ports is presently predicted to grow by as much as 12-15% per year for the next decade. And fourth, local shipyards earn as much as 85% of their revenues in direct foreign exchange. Though it has fallen on some challenging times over the past 25 years, Trinidad and Tobago’s maritime industry must be considered a vital strategic asset. The industry with the establishment of new shipyards would employ more than 4,000 highly skilled workers and would create some of the highest paying jobs in the manufacturing industry. These facts are often overlooked because ship repair and shipbuilding activities must, by their very nature, occur in some of the rural communities (e.g., Chaguaramas, La Brea and Point Fortin, with Port of Spain the only notable exception). While their present contribution to the Trinidad and Tobago’s economy is small – either directly or indirectly – shipyards are a major impact on the overall economic situation, domestically and globally. The situation now faced by the government should be looked on as an opportunity – an opportunity “To develop a world-class maritime cluster”, an opportunity to diversify the economy from the energy sector. The Trinidad and Tobago Shipbuilding and Ship Repair Maritime Cluster strongly urges the government to consider all aspects of this important sector and trusts that it will adequately support and assist in the implementation of plans, as outlined.

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Government Ministries, Committees and State Agencies

Mr. Richard Ramsawak - Industry Specialist Ministry of Trade and Industry

Captain Rawle Baddaloo - Chairman Maritime Industry Development Committee

Ms. Tascha Smith - Market Intelligence Specialist Business Development Company Ltd

Maritime Industry Consultants Global Insight

Barry Rogliano Salles (BRS)

Maritime Logistics & Trade Consulting (MLTC) Page 29 of 41

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Leadership of the Shipbuilding and Repair Cluster

Mr. William Huggins - Leader

Mr. Wilfred de Gannes - Deputy Leader

Mrs. Pearl Pierre-Jones â&#x20AC;&#x201C; Rapporteur

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Shipbuilding and Repair Cluster Stakeholders

Alstons Shipping Limited Ansa McAl Group of Companies

Anti-Corrosion Technical Services Ltd.

ASCO Trinidad Limited

Cantrex Limited

CISL Marine

Caribbean Propellers Limited

Damus Limited Group of Companies

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Caribbean Dockyard and Engineering Services Ltd. A member of the CL Financial Group

Comprehensive Insurance Brokers

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Shipbuilding and Repair Cluster Stakeholders

Engine Tech Company Ltd.

Executive Training Limited

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Equipment & Supply (W.I.) Ltd.

Heritage Designs & Developments Ltd

International Marine & Industrial Inspection

IceBerg Packaged Ice Limited

Image Matters Limited

J-Mec Limited

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Shipbuilding and Repair Cluster Stakeholders

L.P. Marine and Industrial Supplies Ltd.

Lloydâ&#x20AC;&#x2122;s Register Central and South America Limited

Mariners Haven Limited A member of the CL Financial Group

Marine Safety (Training & Consultants) Ltd

Maritime Preservation, Ltd.

Omega Technologies Inc. Ltd

Paul Alonzo

Ninuq Automotive & Industrial Services Limited

Osha Tech.com

Pressure Concrete Plus Limited

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Shipbuilding and Repair Cluster Stakeholders

R. St. Clair Wyllie Maritime Consulting

Strategic Development Partners Limited

Tracmac Engineering Ltd. Member Neal and Massy Group

Trinidad Dry Dock Company Limited

Trinidad Mooring & Launch

Trintrac Ltd.

Tsunami Marine Limited

The Phi Group

Webgold Designs Ltd.

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William Marine Limited

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Additional Information Mr. Wilfred de Gannes, Deputy Leader, T&T Shipbuilding and Repair Cluster, Post Office Box 2853, Chaguaramas, Trinidad and Tobago. Tel: (868) 753.6057 Fax: (868) 662.6326 Website: www.tts-r.com E-mail: degstt@hotmail.com

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APPENDIX 1

Comparative S&R Developments â&#x20AC;&#x201C; Brazil and Qatar Government continues its thrust to diversify the economy from the energy sector, much in the same way as other gas and petroleum exporting countries have already done Brazil, Qatar, Oman and Norway which share similar circumstances to Trinidad and Tobago. Two notable shipyard projects, together with some details highlighting their planned approach in establishing these world class undertakings are located in the Federative Republic of Brazil and the State of Qatar. TABLE 10: BRAZIL AND QATAR SHIPYARD PROJECTS (2009)

LOCATION OF SHIPYARD NAME OF SHIPYARD START OF OPERATIONS PROJECT TYPE TYPE OF SHIPYARD SHIPYARD AREA NO. OF FLOATING DRY DOCK PROPOSED NO. OF GRAVING DOCKS PROPOSED SEA SIDE CRADLES / TRAVELIFTS SERVICE GUIDE JETTIES / WHARF MAX. SIZE OF SHIPS TO BE DRY DOCKED MAX. LENGTH OF SHIPS TO BE DRY DOCKED PRIMARY TYPE OF VESSELS TO BE NUMBER OF PERSONS TO BE EMPLOYED ESTIMATED TOTAL PROJECT COST TT$ ESTIMATED ANNUAL TURNOVER TT$ Notes

BRAZIL Atlantico Sul Q4 2009 New Development Newbuilding 160 Ha. (400 acres) 2 YES 150,000 dwt 400m SUEZMAX, OIL PLATFORMS 30,000 (Directly & Indirectly) $1,386,000,000 $4,000,000,000 Samsung Heavy Industries providing technical knowledge

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QATAR Nikilat-Keppel O & M Q4 2009 (Phase I & II) New Development Repairs & Newbuilding 42 Ha. (100 acres) 1 2 4 YES (3,200 km) 266,000 cbm 400m LNG CARRIERS, VLCCs Data unavailable at present $2,835,000,000 Data unavailable at present Keppel Offshore & Marine providing technical knowledge

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Project Profile – Atlântico Sul Shipyard OVERVIEW Completion of Atlântico Sul Shipyard in 2009 will establish one of the largest shipyards in the southern hemisphere and is located in Suape, in the northeastern Brazilian state of Pernambuco. Brazil is the eighth largest steel producer in the world and the Brazilian coastal shipping sector is protected by laws requiring locally built ships and Brazilian crews. The Atlântico Sul consortium won the right in 2006 to construct 10 suezmaxes at a cost of US$1.21 billion for state-owned oil carrier Transpetro, but the Brazilian presidential elections in October and November delayed the final signing of contracts for the new orders. In January 2007, re-elected President Luiz Inácio Lula da Silva signed two contracts at a grand ceremony held in Suape. FIGURE 12: THE ATLÂNTICO SUL SHIPYARD LOCATED IN SUAPE, N.E. BRAZIL

Source: Atlântico Sul

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One contract was to rubberstamp the contract between Transpetro and Atlântico Sul Shipyard for building the 10 ships; and the other was to confirm the 'soft' loan of US$139.5 million granted by the Brazilian National Development Bank (BNDES) to Atlântico Sul for the construction of the shipyard in Suape, located in the impoverished northeast state of Pernambuco. President Luiz Inácio Lula da Silva has put his full weight behind the project, partly because it will bring wealth to his native northeast and partly because it will create up to 30,000 new direct and indirect jobs. The Brazilian management team at Aker Promar S.A. and Samsung Heavy Industries, the Korean yard and multinational firm, are involved as technical advisers to the Atlântico Sul consortium. About one year after the contracts are signed the first plate will be cut for the first suezmax vessel and delivery of the first vessel will be around 32 to 33 months. FIGURE 13: PRESIDENT LUIZ INÁCIO LULA DA SILVA OF THE FEDERATIVE REPUBLIC OF BRAZIL VISITS ATLÂNTICO SUL SHIPYARD WITH VENEZUELA PRESIDENT, HUGO CHÁVEZ

Source: Atlântico Sul

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President Luiz Inácio Lula da Silva’s entourage was ”very proud” to sign these contracts as they help establish a major shipyard outside of Rio de Janeiro for the first time, and the President comes from the City of Caranhuns, which is only 180 km inland from Suape. Already the State government of Pernambuco has laid down the access road into the Atlântico Sul shipyard which will occupy some 1,650,000m², and the dry docks will be 400 metres long by 73 metres wide. The Atlântico Sul shipyard will be able to construct two vessels up to suezmax size and one oil platform simultaneously. SAMSUNG HEAVY INDUSTRIES (SHI) TO PARTNER WITH ATLÂNTICO SUL Samsung Heavy Industries (SHI) recently signed a contract with the Brazilian shipyard, Atlântico Sul Shipyard, to buy a stake in the firm. In 2006, SHI began technology support for this Brazilian shipyard, which was under construction at that time, and is now the largest shipyard to be built in the Latin American region. On June 11th 2008, SHI announced that it had signed a contract with Atlântico Sul Shipyard to acquire a stake worth US$12.80 million, which is 10% of the total investment in the shipyard. Recently, an ultra large underwater oil field of 40 billion barrels of oil was discovered in Brazil. Petrobras, the state-owned petroleum firm in Brazil, has announced its plans to place an order for 40 drill ships and semi-submersible drilling rigs worth US$30 billion by 2017. The Brazilian government obliges foreign firms to jointly promote manufacturing with Brazilian shipyards when they participate in a bid, to boost the country’s shipbuilding industry. Construction of the Atlântico Sul Shipyard began in April 2007 at the Suape complex in Eastern Brazil, and the yard has a size of 1,650,000m². Camargo, Queiroz, and PJMR, all from Brazil, invested a total of US$220 million into this shipyard. SHI’s acquisition of a stake will allow Camargo and Queiroz each to hold a 40% stake, while SHI and PJMR will hold 10% stake each. This shipyard will boast a dock that is 400 metres long and 73 metres wide, and upon the completion of construction in September 2009, the shipyard will have a ship production capacity of 160,000 tons making it the largest shipyard within the Latin American region. Thanks in part to SHI’s technology support, the shipyard has already received orders to build ten oil tankers equivalent to the Suezmax type, two VLCCs, and one semi submersible crude oil drilling rig, which total US$1.9 billion all together.

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Trinidad and Tobago Shipbuilding & Repair Maritime Cluster Socio-economic benefits to be gained from investing in the Ship Repair and Shipbuilding Industry

Project Profile – Nakilat / Keppel Offshore & Marine Shipyard OVERVIEW Nakilat / Keppel Offshore & Marine has formulated a phased development strategy, in close collaboration with Qatar Petroleum, for the establishment of facilities for the construction and maintenance of marine and offshore structures. Phase 1: Repair and conversion of very large ships (e.g. Q-Max LNG carriers, VLCC’s); Phase 2: Repair of medium-sized ships (e.g. 30,000 dwt to 80,000 dwt); Phase 3: Fabrication of offshore structures (and land-based petrochemical plant); Phase 4: Construction of high value small ships (up to 120m length); Phase 5: Repair of small ships (thereby covering the full range of vessels). The first two phases of Nakilat’s strategy have been approved by the Board of Directors, and a team has been established with responsibility for managing the design, construction and operation of a major new ship repair yard in Ras Laffan. FIGURE 14: THE NAKILAT FACILITY DESIGNED IN ACCORDANCE WITH BEST INTERNATIONAL PRACTICE.

Source: Nakilat / Keppel Offshore & Marine Shipyard

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www.tts-r.com .

Trinidad and Tobago Shipbuilding & Repair Maritime Cluster Socio-economic benefits to be gained from investing in the Ship Repair and Shipbuilding Industry

KEY FEATURES OF THE NAKILAT / KEPPEL OFFSHORE & MARINE SHIPYARD FIGURE 15: NAKILAT SHIP REPAIR YARD WITH INFRASTRUCTURE, DRY DOCKS, QUAYS, BUILDINGS.

Source: Nakilat / Keppel Offshore & Marine Shipyard Nakilat has formed a Joint Venture (“JV”) with Keppel Offshore & Marine - a global leader ship conversion and repair as well as a specialized shipbuilder - to operate the new yard. The JV will provide all mobile equipment (including the floating dock), and the funds necessary to operate the yard. The JV partners will share the risks and rewards of operating the yard. Engineering of Phases 1 and 2 is well underway. Reclamation of the site commenced several months ago. Construction of the Yard is scheduled to start in the fall of 2007, and would be completed in late 2009.

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August 2008

S&R Report  

Socio-economic benefits to be gained from investingin the Ship repair and Shipbuidling industry

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