It has been confirmed that China Merchants Port Holdings have taken full control of Kingston Freeport Terminal Limited (KFTL), the entity that manages the Port of Kingston under a 30-yearconcession agreement with the Jamaican government.
This was made possible by the international French-led shipping and port management company – CMA CGM selling its interest in KFTL to a subsidiary company, Terminal Link, which was up to that point a joint venture of CMA CGM (51%) and China Merchants (49%).
The effect of the change is that CMA CGM has sold its shares in the 30-year concession agreement for KFTL, meaning that China Merchants now has full control of the entity.
Kingston Freeport was the company used by the Terminal Link-CMG CGM consortium to operate, Kingston Container Terminal under the 30-year deal signed with The Port Authority of Jamaica (PAJ in April 2015 to finance, expand, operate and maintain the Port of Kingston.
The overall deal involved more than just the Kingston Freeport, as China Merchant Port Holdings announced recently that the company had completed the initial closing of the proposed acquisition with respect to eight target terminals, including Kingston Freeport, worth US$814.78 million.
On the move, Jamaica’s opposition PNP (People’s National Party) spokesperson on national security, Peter Bunting, said: “The move is a form of economic colonialism by Chinese businesses in Jamaica.
“The Jamaican people are well aware of the long history of fraternal between our two peoples. However, we believe that the concerns that arise from the existing situation could be problematic if they remain unaddressed”.
It follows his appearance in a video, called ‘Chinese Take Over?’, where he made several anti-China statements.
In response, the Chinese Embassy said that it was offended by the “unsubstantiated claim” by Bunting.
The company said that the eight terminals assets include 50 per cent of Odessa Terminal Holding Ltd (Ukraine), 49 per cent of CMA CGM-PSA Lion Terminal Pta Singapore), 100 per cent of Kingston Freeport Terminal Ltd. (Jamaica), 30 per cent of Rotterdam World Gateway (Netherlands), 24 per cent of Qingdao Qianwan United Advance Container Terminal (China), 47.25 per cent of First Logistics Development Company (Vietnam), 14.5 per cent of Laem Chabang International Terminal Co. Ltd. (Thailand) and 100 per cent of CMA CGM Terminal Iraq SAS.
Regarding the change of ownership, of KFTL, authorities there reported that “CMA CGM notified the Jamaican government about the intended transfer before action took place”.
According to the PAJ, the potential transaction was complete and approved, with several similar agreements highlighted as proven successes – with PAJ, KFTL investing over US$250m to dredge the access channel to the harbour, as well as upgrading facilities and equipment.
The investments is set to allow larger vessels carrying up to 14,000 20-foot container units (TEUs) which now transit the expanded Panama Canal, to enter Kingston Harbour and to be processed efficiently at the container terminal.
Previously vessels that were processed at the terminal averaged 3,500 TUEs.