PPPs and Funding Maritime Infrastructure

In Saint Lucia and around the region there are a number of major infrastructure projects either earmarked or already underway. Nobody disputes the benefits such projects can bring, but how best to achieve them remains a contentious topic when it comes to factoring in the pros and cons of public and private partnerships to realise infrastructure goals. This is especially so for any new maritime infrastructure in the Caribbean, which must face up to huge challenges, existing and emerging.

Sailing into Saint Lucia 

Saint Lucia is a great case study in present success and future aspirations around maritime infrastructure. Following the expansion of the nation’s main port in Castries, the port saw an increase of 91,000 passengers, from 669,217 in 2017 to 760,306 in 2018. More recently, attention has turned to the plans for the port in Vieux Fort. 

The announcement in January this year of an agreement in principle between the Chastanet government and Carnival Cruise Line for the construction of the port was welcomed by maritime workers in the nation’s south, an area that has suffered from a drop in activity around the port in recent years, including the 2016 rerouting of banana loading work to Castries. 

Although all wish for the Vieux Fort project to achieve every success, Caribbean nations hold unique considerations in the space of public and private port partnerships. These necessarily inform the potential for such projects to truly be of mutual benefit.

The Caribbean Consideration

Public and private infrastructure agreements in ports are typical of most similar partnerships. A government desires an upgrade of its public amenities and a private enterprise identifies a capacity for profit within it. But when it comes to such arrangements in the region, the devil really is in the detail surrounding the private stakeholders. 

From year to year the Caribbean contends with the growing challenge of climate change and the seasonal risk of hurricanes. Both pose a threat to the future of the region’s tourism industry and require any future agreements to factor in the risk of a huge variable that can result from a natural disaster, as well as the lingering uncertainty surrounding national shorelines and adjoining amenities that are threatened by rising sea levels. Then there is the issue of who is left on the hook for payment in the event a project is stalled, collapses due to a breakdown in the partnership, or is damaged after completion by a severe weather event.

Which Port to Call Home?

Cruise lines can undoubtedly generate substantial capital to back up a project but many of them have a controversial record surrounding their respect of international law, most notably around environmental protection and personal injury claims, among others. 

Any public and private partnership must necessarily come with a recognition of the international nature of finance and business. But if such a partnership comes at the expense of local and national goals surrounding sustainability and workers’ rights, real consideration must be given as to whether a project that is desirable today is ultimately necessary to pursue tomorrow as a public-only option, to guarantee the desired outcome.

Similarly, for cruise lines there are increasingly competing commercial considerations when it comes to partnering with local governments. Given that numerous cruise lines now enjoy exclusive use of private islands and shorelines in the Caribbean, it must be weighed up whether partnering with a government in the building of (or improvements to existing) maritime infrastructure represents the best ROI, especially when contrasted with establishing a new tourist drawcard on a cruise line’s own island. 

Public-to-Public

The opportunity for stronger public-to-public partnerships in this region should also be recognised. The £30 million agreement to fund the United Kingdom Caribbean Infrastructure Partnership Fund (UKCIF) between the Caribbean Development Bank (CDB) and the United Kingdom Department for International Development (DFID) represents a great example of this in action. With UKCIF’s founding mission to drive economic growth through vital infrastructure, the agreement signed in July 2018 guaranteed that all funds spent would be climate-change resilient. This ensured that money earmarked for reconstruction initiatives in Dominica and Barbuda would assist with the task of immediate recovery from a natural disaster, while also building a stronger foundation in the fight against climate change’s impact on the nations. 

In May 2019 Montserrat began construction on a port development in the British Overseas Territory’s Little Bay, with construction funded in partnership with the CDB and UKCIF. The need for construction was long overdue, with 2016 alone seeing 58 out of 457 ships surveyed denied entry to Montserrat due to rough seas. Completion of the project in 2022 is expected to deliver a substantial uptick in cruise liner traffic, as well as optimize access for yachts, ferries and other vessels.

It will also deliver new cargo-handling equipment, and see a focus on institutional strengthening alongside the physical bricks and mortar building, with training opportunities set to enhance the future of personnel around the project.

Failure not an Option

For Caribbean nations confronting a future where a healthy tourism sector will be critical to a healthy economy, the capacity of government to define a long-term plan to the benefit of all must be weighed against private stakeholders who may think exclusively of ROI in the shortest possible time. 

Nobody would wish to decry or deny the abundant opportunities for public and private partnerships in the region. It’s just also true, now more than ever, that failure is not an option with critical maritime infrastructure in new projects that underwrite the future of a nation’s tourism industry, and so many other vital commercial activities alongside.