When East meets West
As far as the Caribbean is concerned, it’s a company that seems to have come from nowhere in a very short time and in doing so has captured two of the region's most prestigious cruise terminal management contracts.
But for those already in the know, Global Ports Holding (GPH), the fast-growing London-listed company with its roots in Turkey, is no new kid on the block. In fact, the group is now the world’s largest cruise port operator. For the Caribbean, at least, this is a newish name and one, given its niche expertise, which is destined to become more established in the coming years.
Emre Sayin, chief executive of GPH, told Caribbean Maritime: “For the last two years or so GPH has been introducing itself to ports throughout the Caribbean and explaining the benefits we can bring. Our model consists of our making an investment in return for a long-term concession to operate the port. We also bring operational know-how, marketing capabilities and help develop services and the destination.
“The investment can be used for building a terminal or it may be used for debt reduction in circumstances where a government has already invested in new infrastructure. This model has been well received.”
Last year GPH was chosen to operate La Habana Cruise Port – the group’s first successful foray into the western hemisphere. In May last year GPH secured a 15-year management agreement with the Cuban company Aries to operate the fast-growing cruise port in Havana. Aries is an enterprise owned by Cuba’s Ministry of Transportation.
And in February this year GPH added another string to its Caribbean bow when it signed a 30-year exclusive concession with the government of Antigua and Barbuda to operate all cruise terminal facilities in St John’s and beyond. GPH has also been chosen as preferred bidder in Nassau.
The upside for Antigua is that the deal calls for GPH to finance the ongoing construction of a fifth cruise berth in St John’s, to accommodate Oasis-class ships, as well as new retail and food-and-beverage outlets. GPH also has management rights for Falmouth Harbour (a yachting facility in Antigua) and for the whole island of Barbuda.
GPH immediately ran into some problems, however, due to a falling-out between the government of Antigua and Barbuda and major customer Carnival Corporation, which subsequently dropped some St John’s calls. Thankfully, these early “misunderstandings” now appear to be resolved. By contrast, as a result of the GPH deal, MSC Cruises has announced plans for more calls in Antigua, citing the already close relations between the two companies in the Mediterranean. Similarly, Norwegian Cruise Line has pledged to support the new Antigua set-up.
GPH seems confident there are other contracts to be won. Mr Sayin told Caribbean Maritime: “We are currently in contact with a number of ports in the region and furthermore we have recently been awarded the tender in Nassau for the concession of the cruise port.”
So why would a port authority want to hand over its cruise terminal to an outside operator? Mr Sayin outlined the benefits: “First, of course, is the opportunity to upgrade and expand their facilities to attract the newest class of ships and ensure that they are properly equipped to accommodate the wave of newbuilds being delivered over the next few years. This translates into economic benefits for the community, especially the creation of new jobs. Second is our ability to attract more traffic. Our relationship with the cruise lines is excellent at all levels of management, plus we have the ability to market destinations in our network around the world. Third, I would say, is operational excellence. GPH is the world’s largest cruise port operator. We have unrivaled opportunities to learn from the ports in our network and bring those learnings to bear in the Caribbean. In addition, I would add our ability to improve the customer experience and the destination.”
Including the Caribbean, GPH operates an impressive list of 17 ports in 10 countries including Portugal, Italy, Spain, Malta, Montenegro, Croatia, Turkey and Singapore, carving out a new niche market in the process. There are also some commercial port operations – bulk, container and general cargo handling – in Bar (Montenegro) and Turkey. In terms of the Caribbean, though, GPH will be focusing on the cruise sector. As Mr Sayin said: “We do have experience in managing commercial ports, but cruise operations are our principal interest.”
Not content with the spectacular growth already achieved, the company now says it aims to double in size over the next five years, without being specific in terms of whether this is in existing sectors or geographical areas.
Ownership of GPH
Global Ports Holding was set up in 2004 and has quickly become an international port operator with a diversified portfolio of cruise and commercial ports. GPH offers clients an integrated platform of cruise facilities serving cruise ships, ferries and yachts.
Global Ports Holding Plc is 59.30 per cent owned by Global Investment Holdings (GIH), a company listed on Borsa Istanbul (BIST), while the remaining 40.70 per cent of the total issued share capital free-floats on the London Stock Exchange (LSE). Perversely, GPH’s share price hasn’t quite matched the company’s overall performance, falling from 750 pence at launch in London two years ago to under 380 pence in late April.
GPH signs 30-year lease to develop cruise port
For the Antigua Cruise Port Development (ACPD) project Global Ports Holding has signed a 30-year lease to develop and operate the cruise complex, which will bring significant benefits not only to the cruise sector but to the overall economy of Antigua and Barbuda. The government will remain the owner of the ACPD project, which includes:
- Pay back US$ 21 million of the Antigua Pier Group’s debt issued for construction of the Redcliffe Pier, which will create additional fiscal space
- Completion of the New Pier, capable of accommodating Oasis-class vessels, at a cost of US$ 30 million
- Development and construction of 50,000 sq ft of retail and food and beverage facilities to be leased to local businesses and people
- Provision of US$ 5 million in funds to qualifying Antiguans with an ambition to start their own business or to develop their small business in the tourism industry
- Upgrade of the Heritage Mall shopping complex.
The cruise port project is expected to make an economic contribution of US$ 898.2 million over the 30 years. GPH will invest over US$ 83 million, with US$ 51 million of this being spent within the first month of operations. The Antigua Cruise Complex has the potential to receive 1 million passengers within the next five years.
Passenger spending in Antigua and Barbuda is well behind the Caribbean average, so GPH will enhance the cruise tourism product with local Antiguans to increase this figure from US$ 73 to US$ 100 per day in the next three years.
- Increase in employment opportunities
- Net increase in revenue to the government
- More fiscal space for the government's budget
- Investment in youth, education and sport
- Enhanced tourism product and experience
- A committed partnership.
Published by Land & Marine Publicaions Ltd on behalf of the Caribbean Shipping Association, in issue 37 of Caribbean Maritime Journal, May to September 2019.
© Credit: Land & Marine Publications - www.landmarine.com
Full published article: https://issuu.com/Landmarine/docs/caribbean-maritime-issue_37/s/103345