Chairman’s Remarks – SAG’s 7th Annual Dinner and Awards Presentation – December 1, 2017
Thank You Madam Chair. On behalf of the Trustees, Management and members of the Shipping Association of Guyana, I wish to welcome you to our 7th Annual Dinner and Presentation of Awards Ceremony being held this evening under the theme “Perspectives for the local Shipping sector in the era of Oil and Gas”.
I wish to recognize the following persons/organisations:
Honourable Ministers of the Government;
Hon. Members of Parliament;
Members of the Diplomatic Corps;
Members of the Shipping Association of Guyana
Members of sister organisations – GMSA, GCCI.
Members of the Private Sector Commission;
Special Invitees, Sponsors for tonight’s event;
Members of the media;
Guests, family and friends.
It gives me great pleasure this evening to welcome you to this event, which is usually our signature event held around this time each year. This year, however, we chose to invite one of the major investors in Guyana’s rich natural resources industry, more specifically our emerging Oil and Gas industry, to give us some insights into developments and expectations in this new sector. But before that, let me give you an overview of SAGs past year of activities, which, along with our perspectives for the future, will comprise my presentation.
We could recall from our last address to this gathering, that SAG had adopted a strategy to engage in a number of initiatives to streamline the development of the port of Georgetown in particular, and the three major ports in general. These plans are still engaging our attention with Central Government through the Maritime Administration Department and the Ministry of Public Infrastructure. Our advocacy activities have borne some measure of success in the areas of dredging, pilotage and hydrographic surveys.
It is our understanding that a new hydraulic suction pump, as well as other much needed spares had been installed on the STEVE “N”. The installation of these spares has resulted in greater efficiency in maintenance dredging, as over the last several months, a large amount of spoil had been removed, resulting in the draft in the Channel to show some improvement from 4.9 meters to a range of about 5.5 to 5.9 meters. This has been observed by vessels transiting the Channel as well as by local soundings carried out by MARAD. As a result, vessels are now able to transit the channel at later stages of tides.
As it relates to pilotage, we had recently witnessed the graduation of nine pilots attached to the Maritime Administration Department. It is our hope that this initiative will serve to augment the pilotage services provided by the Department for greater efficiency.
During the year the SAG was engaged in several consultations with various potential donors and investors in relation to a range of services. Those included the following:
GPM – Guyane of French Guyana in relation to short sea shipping
The Panalpina Group out of Switzerland in relation to specialised heavy duty equipment
Lloyds Register of the United Kingdom in relation to training in the Oil and Gas sector
The Inter-American Development Bank in conjunction with the Institute of Environment and Development (IDAD) in relation to the Land Transport link and Deep Water Port project linking northern Brazil with a port on Guyana’s coast.
We were also involved in discussions with the UK Hydrographic office with responsibility for the Commonwealth Marine Economies Programme. This programme is related to updating Guyana’s hydrographic chart in preparation for an IMO Audit in February of 2018. SAG also attended a workshop conducted by the Ministry of Public Infrastructure, who made a presentation to key stakeholders on the Feasibility Study and Design for the new Demerara River Bridge. The SAG welcomes this initiative and looks forward to the benefits it promises to deliver to both motorists and mariners.
During the period under review, efforts were also made to regularize some of the operations at terminals with the introduction of systems aimed at bringing some order to the operations involving but not limited to private haulers. All operators were brought under the registration of the SAG, coordinated by the Secretariat.
Also during this time SAG was approached to be host of the Caribbean Shipping Association’s Annual General Meeting in October of this year. We were forced to decline this offer, due to a lack of support from members of the business community, who were experiencing a slowdown in the economy, as well as the lack of enough time to prepare. Our sister Association, the Barbados Shipping Association, in collaboration with Barbados Port Inc. took up the offer to host at short notice, and I am happy to report that it was a resounding success. Our next opportunity to host this mega event will be the year 2020, and we do hope that we would be prepared and ready to grab this chance with both hands, since we see it as an opportunity to showcase Guyana to the world.
For the year 2016, container TEUs totaled 69,216, an increase of 0.73 percent over the previous year’s figure of 68,715 TEUs. There was a decline in exports of 19%, while imports increased by 14%. As at October 2017, total TEUs stood at 53,949 as against 56,714, a decrease of approximately 5%. It is envisaged, however, that there will imminently be an improvement in this situation, which we feel came about due to the change in the political landscape.
SAG is of the opinion that the local shipping sector has been making slow but sure progress over the years. However, in view of our perspectives for its future, which are enshrined in the overarching opinion that a new wave of hope for an economic takeoff is imminent with the discovery and development of the oil and gas industry in Guyana, we will continue to use this and other forums to keep our membership/stakeholders informed of the status and plans for the development of the shipping industry. We should not, however, lose sight of the importance of the other sectors on which we have depended for our livelihoods in the past. We must be cognizant of the fact that some of the spoils from oil and gas should be used to develop other areas such as river and coastal transportation in Guyana, which is in dire need of infrastructural modernization. There is a need to rehabilitate harbours and stellings, to provide proper and cost effective transport for produce from the riverain areas to the main port for packaging and export. This will ensure that small producers will be afforded opportunities for growth and development which would lead inevitably to the empowerment of farming communities.
This leads me to the issue of Short Sea shipping which has been engaging our attention for a number of years. We at the SAG see this as a necessary investment in an effort to reduce shipping costs and transit times for local produce as well as locally manufactured items among islands in the Caribbean. Currently, freight costs are high and there is a dire need for transshipment in order to get local produce to some Caribbean islands in a timely manner.
There is also a need for improvement and development of the main port in Guyana. Users of the Demerara harbor have continuously been advocating for capital dredging which we see as necessary for shipping costs to be reduced as well as in preparation for planned investments in its modernization. We envisage the need for a new port to facilitate increased tonnages in rice, lumber, fertilizer, bauxite, silica sand, manganese and other bulk cargoes. As mentioned before, there is a lingering initiative for the construction of a port on the West Bank in the vicinity of Versailles, which is intended to solve the current problems plaguing port operators even up to today. A new larger pier, larger logistics area and modernised port facilities are needed in order to increase capacity of the port and also to bring it to international standards to welcome the gearless vessels of the future.
While we applaud the efforts of MARAD in its attempt to bring some measure of relief to mariners in the Demerara harbor, the current draughts still do not lend to competitiveness of produce from Guyana, as shippers find it more economical to export logs and scrap metal in containers instead.
Oil and Gas
Calls have been mounting for an on-shore facility in Berbice to complement the off-shore operations in the oil and gas industry. While we wait, countries nearby have begun to upgrade ports to capture business from Guyana and Suriname, as we have witnessed at the Galiota port in Trinidad, in order to capitalize on these opportunities. The Government of Guyana, in their budget presentation foe 2017, had mentioned the allocation to be set aside for a feasibility study to be done for the establishment of a shore based facility to support the oil and gas activity. SAG would be delighted to hear more about this. It is our hope that we, as a country, would be able to grab the opportunities presented to us so as to benefit fully from local content initiatives.
There is growing concern about the apparent slow pace and lack of effort being made to improve the Georgetown port. We are aware of efforts being made by our Caricom neighbours to capitalize on this situation, especially with the renewed attention being shown in the Brazil/Lethem road link study being conducted by various organisations, and the need to provide access to the Brazillian cargo from north Brazil through the Atlantic. This is an issue that has been engaging the attention of many businesses both locally and on the Brazillian side of the border. Some much needed information on the upgrade of the Demerara harbor would be most welcome.
In closing, I wish to advocate for more action on the aforementioned issues. We feel that progress could be made with more public/private collaboration for port development and infrastructural support. It is our hope that a wider cross section of companies will see the need to join the SAG since we believe that there is strength in numbers, and we do have plans to diversify our membership. We have been approached by a number of foreign companies seeking to join our association, while locals have been very tentative, only securing information and collecting application forms. Let us remember those famous words, “Ask not what the SAG could do for you, but what we could achieve together”.