Port Development: Luring investors to our shores

The Shipping Hub, Ocean Economy and Africa Strategy are the three main pillars of the opening up of the Mauritian economy. According to Finance Minister Vishnu Lutchmeenaraidoo, various projects in these sectors are in good progress. The Port development is a landmark project encompassing these emerging sectors necessitating billions of rupees of investment and with a massive job creation potential. News on Sunday revisits this venture. The Port Louis harbour will see unprecedented transformation in the years to come, with extension and upgrading works to accommodate enhanced activities such as bunkering, Freeport, fishing, among others. In this context, a high level delegation from the China Development Bank will be in Mauritius next week. The delegation will undertake a financial evaluation of the construction of a fishing port at Bain des Dames. The exercise, led by General Manager M. Zhang Huaguo and Director of International Cooperation Business Departmnent, M. Shao Rui, will last one month. The China Development Bank is keen to finance the project which will be undertaken by LHF Marine Development Ltd. It is a vast project with fully equipped port infrastructure, a quay 700 metres long and with facilities to accommodate transformation and warehousing of seafoods. It is estimated the project will create 500 direct jobs. It is to be noted that the initial project has been modified to take into account certain issues raised, namely the discharge of muddy water at GRNW estuary during heavy rains, and the risk of high waves at Bain des Dames. The financial aspect will have to consider these factors. Once the evaluation is complete, the promoters will activate the project implementation, with works scheduled to start in mid-2016. The harbour development is part of the Port Louis Smart City project, as the capital is set to see a major upliftment in infrastructure and lifestyle. The ex-Neotown project at Les Salines will give way to a new leisure park on the waterfront and a world class aquarium. The buffer zone of the Appravasi Ghat as well as China Town and other heritate sites will be fully upgraded. The gist of the project consists of the complete overhaul of the two bus stations of Port Louis, Victoria Square and Immigration Square, to include commercial spaces and a walkway linking Victoria Square to Caudan. On the other side of the capital, towards the north, Riche Terre will see new development in the Jon Fei zone, over 175 acres. The remaining 375 acres may be allocated to DP World for the setting up of Freeport services. Agreement signed Mauritius and United Arab Emirates have last year signed an Investment Promotion and Protection Agreement. The objective is to boost cross-border investment by protecting investors from direct or indirect double taxation, improve commercial and economic relations and broaden investment opportunities. This agreement is of strategic importance in the light of significant economic exchanges planned with the United Arab Emirates (UAE) for major development projects, in particular the Maritime Hub of Port Louis. Mauritius has held extensive discussions with DP World, the UAE port operator which currently manages 65 ports around the world, in regards to the development of the Maritime Hub, including the setting up of a free port in the area of Jinfei at Riche Terre. Potential UAE investors such as Allana Group, the UAE Exchange and Pure Gold Group, have expressed interest to invest in Mauritius in sectors such as manufacturing, financial services and the freeport among others, or to use Mauritius as a platform to invest in Africa.

About MPA Formerly known as the Mauritius Marine Authority (MMA), the Mauritius Ports Authority is the sole national port authority set up under the Ports Act 1998, to regulate and control the port sector. The MPA is a landlord port authority, providing the main port infrastructure and superstructure, together with related facilities. It also provides marine services and navigation aids, while it regulates and controls all port activities and environmental issues within the designated port areas. The MPA is also responsible for the implementation of the Master Plan.

About DP World DP World is a leading enabler of global trade and an integral part of the supply chain. It operates multiple yet related businesses – from marine and inland terminals, maritime services, logistics and ancillary services to technology-driven trade solutions. It has a portfolio of 70 terminals in 31 countries across six continents with a significant presence in both high-growth and mature markets. Its dedicated team of over 36,000 employees cultivates long-standing relationships with governments, shipping lines, importers and exporters, communities, and many other important constituents of the global supply chain, to add value and provide quality services.

Figures (2014) In 2014, cargo traffic amounted to 6,896,149 tonnes with imports accounting for 5,746,120 tonnes and exports 1,150,029 tonnes. The container traffic included 251,798 captive containers and 151,203 transhipment containers. During the same year, the number of containerized vessels calling at Port Louis was 607. There were 8 Dry Bulk Carriers, 61 tankers, 7 general cargo vessels and 1,067 fishing vessels. 18 cruise vessels also stopped at Port Louis. Other types of vessels amounted to 1,511.

[[{"type":"media","view_mode":"media_large","fid":"10450","attributes":{"class":"media-image aligncenter wp-image-18872 size-full","typeof":"foaf:Image","style":"","width":"500","height":"334","alt":"_MED4039"}}]]Arvind Nilmadhub: “The Mahebourg Harbour has been forgotten” Economist Arvind Nilmadhub told News on Sunday that the development of the Freeport and the Manufacturing sectors rely heavily on a modern efficient harbour. “If we want to boost the Freeport sector, encourage more value addition services for export, rekindle our manufacturing processes by tapping new areas, then obviously the development of the harbour is a major facilitating factor,” he says. “Traditional manufacturing has to evolve and new areas explored. I am thinking here of the manufacture of semi conductors for the global IT industry, component parts for hi-tech equipment, assembly of such items like mobile phones, solar panels, etc. These are mainly Freeport activities and there is huge scope. Even in traditional manufacturing, there are new niche activities in textiles, which we are yet to tap.” For him, the harbour development is necessary to cope with the high volume of trade expected in the coming years. “While the government is planning to invest massively in the harbour sector, I feel we have forgotten the old project of a harbour in the South. A harbour at Mahebourg is important for relieving the jam at Port Louis, but more importantly for the delivery of jet fuel directly to Mahebourg, thus eliminating road transport by trucks from Port Louis to Plaisance. The Mahebourg harbour would have also helped in regenerating the south of the island, creating jobs and opportunities in ancillary services,” he explained. He concluded that non-value added components of the overall project should be scrapped. “For example, I don’t see the need to give prime land to foreign investors to develop such thing as a wedding venue, something that can aptly be done by local investors.”

Enter DP World DP World has already submitted its final proposal and the government has asked the Mauritius Ports Authority (MPA) to enlist a consultant to determine the pros and cons of this proposal. The expert will be chosen according to the clauses of the Public Procurement Act. According to sources quoted by Le Defi Quotidien, there will not be any international expression of interest, but the consultant to be chosen must have a good international standing and qualified for such exercise. The government wants to speed up this exercise but will still ensure that the main aspects of the projects are not overlooked. Last week, representatives of DP World were in Mauritius for discussions, and they may come again if needed.

Workers’ unrest

In the meantime, a feeling of resentment is building up among a section of workers. About 12 trade unions wrote to the Prime Minister last week to express their disagreement with the choice of DP World. They are demanding that the proposal of DP World be made public, according to Le Defi Quotidien. “We have learnt that DP World wants a lease of 99 years and 75 of the shareholding of the Cargo Handling Corporation.We believe this is detrimental to the sovereignty of Mauritius, national security, workers’ rights, and even consumers’ rights as DP World can impose whatever price it wants to handle containers. It must be noted that Mauritius imports more than 80% of its consumption and the bulk of it is via containers,” Ashok Subron, trade unionist, told Le Défi Quotidien.