More questions than answers on logistics hub
CONGRATULATIONS are due to Diana Macaulay of the Jamaica Environmental Trust for her actions on behalf of her organisation and all of us in an attempt to prevent the siting of a major construction project on Goat Islands, which lie at the heart of our coastal reef system.
It is inconceivable that a government which claims to be environmentally aware should give even a moment’s consideration to a proposal which will inevitably cause irreparable damages to the ecology of the neighbouring reefs.
Indeed, the Government has established an Environment Protection Agency, from which approvals must be obtained by every developer in Jamaica before commencing a project that might possibly adversely affect its surroundings.
The first question, therefore, is: Was this agency involved in the planning of this particular project and was its approval given to the location of the proposed facility? Of more importance is the fact that Ms Macaulay has brought to the forefront a matter which has hitherto been shrouded in secrecy, even though negotiations have advanced to the point where a site at Fort Augusta has been considered and rejected. There has been little or no mention of this in the media.
Even the name “logistics hub”, which sounds more like a building full of computers, looks like a feeble and foolish attempt to divert attention from its actual functions, which is that of a more understandable “transhipment port” similar to the one now under construction at Freeport in the Bahamas.
The second question, therefore, is: Was the Port Authority brought into the picture and did it agree to this incursion into its territory? Unless of course, the intention is that the Chinese will provide money and technical expertise to construct the facility following which the Port Authority will take over the transhipment part and the loan will be repaid from future profits.
If this were so, however, one would expect that the Government in these times of economic hardship would be patting itself on the back and trumpeting far and wide its success on bringing the largest foreign investment in recent times into the island.
In the absence of this and all the attendant secrecy it must be assumed that the port will be an offshore facility owned and operated by a China-based company.
So question number three: What will be the benefits to Jamaica? All of the operating costs will be paid by the Chinese company and no duty can be charged on goods which do not enter Jamaica. The construction work will consist mainly of dredging, sheet pile driving, gantry cranes, container handling equipment and storage, in which the Jamaican labour force will take little part; except for some paving and roadways, together with administrative offices, there will not be much for us to do.
The financial arrangements will doubtless be in US dollars between the Chinese company and the ship owners and the accounts will not be accessible to our Inland Revenue Department, so no company profit taxes will be collected.
In short, although some ground rent might be charged for the use of the territory, which would be peanuts in comparison to the size of the project, the benefits to Jamaica will be negligible. In fact, the only tangible outcome would appear to be increased friction between workers and Chinese nationals earning their living on Jamaican soil.
The recent International Monetary Fund (IMF) agreement contains conditions which are intended to encourage overseas investment in Jamaica, but it is apparent that this is not the sort of investment they had in mind.
Nobody spends so much time and effort to achieve so little unless there is some benefit somewhere along the way.
Next question, where does the contractor general fit into all of this? It will be, without a doubt, the largest construction project carved out in Jamaica for many years and although Jamaican contractors will not be involved, the same level of oversight is required to make sure there is no skullduggery.
There have been numerous instances where the Government has borrowed large sums of money to carry our projects which were desirable but not absolutely necessary and which Jamaica could not afford. The large $1.3-billion shed at Half-Way- Tree, designed to keep sun and rain off commuters and buses alike, comes to mind. So do the improvements to the road between Harbour View and the airport, which has never seen traffic jams and where the sand deposited by a hurricane storm surge is usually removed before the airport is able to reopen.
The hub was an opportunity missed for Jamaica to borrow money for a project which would pay for itself and continue to provide income for many years to come. The question must therefore be asked: Why was this opportunity not seized with both hands?
Stop the presses. Recent news is that reporters were barred from a meeting between the minister of industry and commerce and members of the Jamaica Exporters’ Association and we were advised that the Chinese require a total of 3,000 acres to build the port with an “industrial park” alongside. Question: What is it that the minister had to say to the exporters which he did not want the world to know? If true, 3,000 acres is nearly five square miles, which is pretty large for an industrial park.
A rather naïve economic analyst on local TV recently said that the project should be allowed to proceed at Goat Islands because it will create 10,000 jobs for Jamaican workers.
Is it reasonable to suppose that the Chinese would construct and maintain such a facility with roads and pavings, security fencing, electricity, water and sewage, with or without buildings, for the use of the Jamaican manufacturers? The only reason for having such a facility next to a port is to simply economise on the cost of exporting manufactured materials.
Assuming that the port will require 100 acres and each of the manufacturing enterprises will require an average of 10 acres each (150yds x 320 yds), do we have 290 Jamaican exporters who would wish to construct or rent a factory in the proposed industrial park? What would they be exporting and where would raw materials and financing come from?
A much more logical and plausible explanation for the whole project could be that the Chinese want space closer to the United States in which to manufacture or assemble some of their items (plastics, household goods, electronics, etc) with which they have already flooded America. In this scenario, the plants would have highly automated production lines operated by Chinese technicians with Chinese supervision and overall management. These personnel would be housed in dormitory accommodation on site and token participation of the Jamaican workforce would be limited to some maintenance and garbage collection to placate the unions. Even during construction their involvement is likely to be minimal and short-lived, as most of the buildings would doubtless be prefabricated. Therefore, what is being made out to be a massive investment in the Jamaican economy would be minimal as far as the Chinese economy is concerned.
Even the name transhipment is a misnomer as the number of super container ships will be relatively small and it would have difficulty in taking existing business away from similar facilities at Freeport, Bahamas which is much closer to the United States’ eastern seaboard.
In short, unless someone can come up with a reasonable explanation of the proposed project and how it will benefit Jamaica, it would seem that our Government is gullible enough to sell the country’s birthright for a bowl of chop suey.
It is therefore time for the prime minister and any other ministers involved to give us full details of the “logistics hub” arrangements so that our suspicions may be proven to be unfounded.