A proposed southern loop could help boost the number of cruise ship visitors to Trinidad and Tobago

It was not until 2011 that Trinidad and Tobago created a separate Ministry of Transport, spinning it off from the Ministry of Works and Infrastructure. As currently constituted, the ministry is responsible for all aspects of public transport by land, sea and air. The ministry oversees a range of dedicated departments and agencies, including the Public Transport Services Corporation, the Vehicle Management Corporation of T&T, the Maritime Services Division, the Port Authority of T&T (PATT) and the Airports Authority of T&T. The ministry also oversees the Water Taxi Service, the Licensing Authority, which deals with the registration of motor vehicles and drivers, and National Helicopter Services, which provides offshore air transport to the oil industry.

Infrastructure

T&T has 8320 km of roads, of which 4252 km are paved. The country has four airports, two of which have paved runways (Piarco International near Port of Spain and ANR Robinson in Scarborough). In June 2015 it was announced that the paving works of the Camden Airfield’s runway had been completed, to accommodate the arrival of the Boeing 727 donated by FedEx to the University of T&T (UTT) Aviation Institute in Couva. Reflecting the importance of its energy industry, the country has 1567 km of natural gas pipelines, 587 km of crude oil pipelines and 257 km of condensate pipelines, a network that links many on-and offshore production fields to the refinery and petrochemicals installations in the southwest near Point Lisas, Pointe-à-Pierre and Point Fortin. T&T has a merchant marine fleet of four vessels, including a petroleum tanker. There is an oil terminal at Galeota Point in the south, and major ports are located at Port of Spain, Point Fortin, Point Lisas and Scarborough.

High Vehicle Ownership

Because of its relatively high standard of living, T&T has a high vehicle ownership rate. According to World Bank data, in 2007 car ownership per thousand members of the population was 353, one of the highest rates in the Caribbean (Jamaica’s comparable figure was 188) and more than various relatively urbanised Latin American countries such Argentina (314), Mexico (275) and Brazil (249). Marc Rostant, a manager at car sales and leasing company Massy Motors, told OBG that vehicle sales remained buoyant. “People are buying second and even third cards. A second car for the school run, and even in some cases a third car for older school children so they can drive themselves to school,” he told OBG. According to statistics from the central bank, 19,118 new vehicles were sold in 2014 a 10.8% year-on-year increase from 2013 and a 28.7% rise as compared to 2012. In the first quarter of 2015, motor vehicles sales amounted to 4321, which was slightly higher than the 4311 recorded in the same period in 2014.

While private vehicle ownership has surged, the public transport system is relatively underdeveloped. There is a small public bus service with limited routes. It is estimated that between 240 and 250 buses operate on a normal weekday across the country. More routes are offered by privately run “maxi-taxi” services – vans and drivers that follow specific itineraries. As a result of these factors, together with some bottlenecks and pressure points in the road and highway system, the country can experience a degree of congestion.

The minister of transport, Stephen Cadiz, told OBG that in response to this issue the government’s priority was to develop the San Fernando-Point Fortin and the San Fernando-Mayaro highways to unlock a wide range of new economic activities across the country. Unlike the previous administration, which had considered the introduction of a north-south passenger rail system, the current government believed the way forward was to further develop road-based public transport. Cadiz said that consideration was being given to creating new preferential bus commuter routes between Arima and Port of Spain and between San Fernando and Port of Spain, in part modelled on the bus rapid transit systems introduced in Latin American cities like Bogota (Colombia) and Curitiba (Brazil).

Congestion

Members of the business community have mentioned road congestion as a factor affecting their activities. Ramesh Ramdeen, chief executive of the T&T Manufacturers’ Association, told OBG that port and road congestion can increase costs. “In the past, you could move three containers at a time from Arima to Port of Spain, now you cannot; the best you can do is move them one at a time because of traffic congestion,” he told OBG. Louanna Chai-Alves, executive director of the Trinidad Hotels, Restaurants and Tourism Association, commented on ambitious plans to develop the north-western peninsula of Chaguaramas ( formerly a US naval base during the Second World War), noting that their viability might be limited by already high congestion on the single main access road.

Speed of delivery is of particular importance to express courier services. Giselle Callender, operations head at DHL Express, told OBG that the increasing trend towards online shopping was leading to growing volumes of parcel deliveries. Logistical factors included the time taken for Customs clearance at Piarco International Airport, and traffic density on the main highway from Port of Spain south to Point Lisas and San Fernando.

“On a normal day, the clearance process allows our morning flight to land and clear shipments in the mid-morning period, such that we can achieve same-day delivery of shipments to our customers,” she told OBG. Extra heavy traffic, accidents and southbound roadworks were all unpredictable factors that could be mitigated by designing a manageable route structure with well-defined and executed pick up and delivery times. Callender said that, as in most developing countries, more roads and better traffic flow were a priority, however.

International Comparison

International assessments of the transport and logistics sectors have noted T&T’s areas of strength, including good air links and a high-quality road network, although its geographic location in the southern Caribbean can be interpreted as a disadvantage as a result of its distance from busier maritime trade routes. The World Economic Forum (WEF) “Travel and Tourism Competitiveness Index” (TTCI) assesses a range of factors and policies to determine the travel and tourism sector’s attractiveness in different countries. In the most recent edition of the report (2013) T&T was ranked 83rd in the world out of 140 countries surveyed. The TTCI is composed of 14 different sets of indicators or “pillars”, two of which focus on transport-specific features; air transport infrastructure and ground transport infrastructure. In both of these specific categories T&T did better in the rankings than it scored overall, suggesting that air and ground transport links tend to lift the country’s attractiveness for travel and tourism development.

In the air transport infrastructure category the country was ranked 56th, scoring well in departures per thousand members of the population (ranked 25th) and airport density per million people (31st), though it scored poorly in the number of airlines (114th).

In the ground transport infrastructure category T&T was ranked an impressive 34th in the world, doing particularly well in road density per million people (21st), but less so for quality of port infrastructure (91st). The conclusion appears to be that the country’s air links and road network are adequate and supportive to the tourism industry at its current level of development.

Transport Competitiveness

In the WEF’s annual “Global Competitiveness Report” 2014-15, which examines a series of economic performance indicators, T&T was ranked 89th in the world out of 144 countries listed. Of the 12 pillars used for the assessment, the relevant to the transport sector is the infrastructure pillar. Here the country does better than its aggregate WEF ranking in quality of overall infrastructure (52nd), quality of air transport infrastructure (57th), quality of port infrastructure (65th) and quality of roads (66th). The picture that emerges from this survey, therefore, is one where air infrastructure looks particularly strong, while port and road infrastructure a little less so when analysed from a more general economic perspective.

Trading Across Borders

The “Doing Business 2015” report prepared by the World Bank focuses on how easy or difficult it is for a local entrepreneur to open and run a small business when in compliance with the relevant regulations. While this report does not have any direct transport-specific categories, one of the 10 it regularly analyses is linked to the import-export transport business process. Overall, T&T was ranked 79th in the world for ease of doing business in 2015, and in the trading across borders category it was ranked slightly higher, at 76th.

On average, the World Bank found that in T&T five separate documents were required to be able to export goods, it took 11 days to complete the process and it cost an average of $843 to ship an outbound container. These indicators looked to be broadly competitive when compared to the country’s Caribbean peers. Jamaica, for example, required six documents and 20 days to complete the same process, with the average cost of shipping a container standing at $1580. On the import side T&T also looked broadly competitive, although a little more bureaucratic, as 10 documents and 14 days were required, and the average cost of importing a container stood at $1260.

Liner Connectivity

The UN Conference on Trade and Development compiles a shipping line connectivity index, designed to reflect how well connected a country is to the world’s main container shipping routes.

The index assesses five components of a country’s maritime transport sector: the number of ships; their container-carrying capacity; maximum vessel size; the number of shipping services; and the number of firms deploying ships in that country’s ports. The world’s best-connected country was assigned a score of 100 in 2004 and all subsequent scores are indexed to that baseline. In 2014 Singapore, one of the world’s busiest and best-connected ports, had a connectivity index of 113.2. T&T achieved 17.3, higher than St Lucia (4.6), Barbados (4.7) and Cuba (4.9). Yet it was less well-connected than Venezuela (19.4), Jamaica (24.5) and the Dominican Republic (26.3); Panama, benefitting from shipping lines’ use of the Panama Canal, scored 43.7.

Logistics Performance Index

One of the bestknown comparative transport studies is the annual logistics performance index (LPI) compiled by the World Bank, which has quantitative and qualitative ( surveybased) information into a single score, ranging from 1 to 5. The index is compiled as a weighted average of six different scores, including: efficiency of the clearance process at Customs; the quality of trade- and transport-related infrastructure; the ease of arranging competitive pricing for shipments; competence and quality of logistics services; ability to track and trace consignments; and timeliness of shipments.

The scores are used to build country rankings to demonstrate relative performances. Unfortunately, due to a lack of a large enough sample of survey responses, T&T has not been included in the LPI. However, in 2013 a joint study by the University of Miami and the University of the West Indies suggested that the country would have been ranked 68th out of 155 countries.

Ernest Ashley Taylor, the president of the Point Lisas Industrial Port Development Corporation, was involved in the study, and he suggested that faster strides needed to be made by T&T in the areas of Customs, labour, trade and maritime reform.

Transport Policy

In September 2014 the government presented its budget statement for fiscal-year 2015 – the year running to the end of September. It included various announcements relating to the country’s transport sector, including plans for ongoing and future projects. When making the announcement, the minister of finance and the economy, Larry Howai, who presented the budget statement, noted that “the recently commissioned Galeota Port will provide significant logistical support to the oil and gas industry in the south-east region and in the process will generate economic development and job creation.”

The minister also proposed amendments to maritime legislation that could improve the growth prospects for the manufacturing sector by making the investment climate more attractive.

Howai also mentioned support for the yachting industry, with training for yacht building and maintenance to be delivered by the UTT, in partnership with the Southampton Institute – Warsash Maritime Centre for Maritime Training. Concerning the road network, Howai said that the aim of the government was to “open all economic space in the country through a network of roads and highways which will provide safe, reliable and efficient transport. Business and government services will be increasingly decentralised as economic opportunities open throughout the country.”

The government’s budget statement also highlighted work on the 47-km four-lane San Fernando-to-Point Fortin highway; the modernisation of the east-west road corridor to reduce “frustrating levels of traffic congestion” and other road widening and by-pass projects. Plans were also progressing for a highway between San Fernando and Mayaro, and the government was considering a public-private partnership for an alternative access route to Chaguaramas on the north-west peninsula. In terms of improving the public transport offering, the minister reiterated the T&T government’s commitment to creating a network of “efficient, reliable, and affordable transportation for our citizens”. The government was also in the process of purchasing about 100 new compressed natural gas (CNG) powered buses that would enable it to expand existing routes and carry more passengers. However, while oil prices are low and the switch to CNG less pressing, other public transit options are also being considered.

For example, the minister reiterated a promise to improve the ferry service between the islands of Trinidad and Tobago. Howai also noted that, given the introduction of the new Motor Vehicles and Road Traffic Act, which however will not be passed by parliament before September’s general election, the government would be setting up the required Motor Vehicle Authority to regulate the sector. He also said that hybrid and electricity-powered vehicles would enjoy motor vehicle tax and VAT exemptions, effective from January 2015.

Austerity Measures

The budget statement was made at a time when the government was projecting its revenues on the assumption of an international oil price of $80 per barrel and a gas price of $2.75 per million British thermal units (mBtu).

Against the background of a sharp fall in hydrocarbons prices in January 2015, Prime Minister Kamla Persad-Bissessar said that the budget was being re-cast on new, more conservative assumptions of $45 per barrel of oil and $2.25 per mBtu of gas. As a result “there will be areas where we must moderate or re-direct our spending to manage the situation,” she said.

Both the current expenditure and public investment plans are expected to be reviewed with the aim of identifying TT$4.5bn ($694m) in savings. It was not immediately clear what level of savings would be required in transport-related areas. However, the prime minister did say in the same speech that “a shift in our spending and investment priorities will see a maintained focus on transport and community infrastructure, rural development and construction”.

There had been some suggestions that the San Fernando-Mayaro highway project should be postponed. However, in March 2015 the minister of works and infrastructure, Suruj Rambachan, announced that plans to start construction of the first San Fernando-Princes Town highway segment were in an advanced stage.

Caribbean Airlines

Caribbean Airlines (CAL) is the state-owned flag carrier of T&T, created in 2006 as a successor to BWIA West Indies Airways and operating out of Piarco International, near Port of Spain, as its main hub. It also serves as the flag carrier for Jamaica (which after the closure of Air Jamaica took a 16% ownership stake) and has an operational base at Norman Manley International Airport. CAL also has flag carrier status for Guyana. The company currently operates the main Caribbean flight network, including services to Caracas, Guyana and Suriname, as well as longer-haul links to Miami, Fort Lauderdale, Orlando, Toronto, New York and London. It has a core schedule of over 600 weekly departures and a fleet of 14 Boeing 737-800s (each with capacity to carry 154 passengers), two larger Boeing 767-300ERs (221 passengers) and five ATR 72-600s (68 passengers). In February 2015 finance minister Larry Howai said CAL had made an unaudited $60m loss in calendar 2014 and was undergoing a transformation process that would take three to four years. Under a new strategic plan the airline was aiming to reach a break-even point by 2017.

Maritime Industry

T&T has a long-standing maritime and marine services industry, estimated to include around 350 companies of different types. The minister of trade, industry, investment and communications, Vasant Bharath, has summed up the authorities’ positioning by saying, “As a nation with a long-standing maritime history, T&T has always benefitted from a favourable geographical location away from the hurricane belt and strategically located between key trade routes connecting North and South America, and a relatively cheap source of energy”.

Shipping specialists point out that the Gulf of Paria forms a natural harbour, where winds do not exceed a monthly average of seven knots and wave heights are under one metre on the same basis. International shipping lines regularly calling at T&T ports include Maersk, Zim, CMA-CGM, Hapag-Lloyd and Crowley.

Developing a Hub

Since 2005 a Maritime Industry Development Committee (MIDC) has been charged with developing and implementing a strategic plan for the sector. The MIDC has announced that its aim is to develop T&T as “a maritime hub and global leader in the maritime industry characterised by service excellence, innovation, customer focus, environmental sustainability and human resource development”.

The islands have two container terminals, one located in Port of Spain and the other in Point Lisas. Other facilities include liquefied natural gas, break-bulk and trans-shipment ports. InvesTT, the country’s investment promotion agency, has been seeking to attract foreign investors into various potential marine development projects. These have included proposals for a $1.7bn trans-shipment port at La Brea and a $1.2bn ship repair and maintenance facility near Sea Lots, the gateway to Port of Spain.

Galeota Development

The government, via the state-owned National Energy Corporation of T&T, has been involved in a major programme to develop the Port of Galeota in the south-east of the country. Two investment phases were envisaged. The $85m phase one was completed in late 2014, and preliminary studies have begun for the $110m phase two.

Phase one of the project involved the construction of a 529-metre, five-berth quay; an 80-metre wide navigational channel; and a 200-metre-diameter turning basin. Included in this phase was the construction of a specialised fish-landing facility, intended to support the local fishing communities. As a result of engineering work in phase two, the port will be able to accommodate deeper-draught vessels, up to 12.8 metres. Seven new berths will also be built.

Vernon Paltoo, president of National Energy, told OBG that the port is meant to act as a logistics centre for energy service companies to expand to other countries within the region, namely Suriname, Guyana and French Guiana. “These countries do not have the port capacity to support their fledgling hydrocarbons sectors and this represents a clear opportunity for companies in T&T,” Paltoo said.

La Brea Expansion

Port expansion will also be necessitated at the Port of Brighton in La Brea, on the south-west coast to support the proposed $987m Mitsubishi methanol-to-dimethyl ether (DME) plant.

While Mitsubishi will have a majority stake in the project, the government has taken a 20% share and local conglomerate, Massy Holdings, has 10%. To enable DME exports it will be necessary to rebuild and upgrade Berth 2 at the port. Paltoo told OBG the port will also support BPTT’s Juniper project.

Point Lisas Reprioritised

In March 2015 the Ministry of Trade, Industry, Investment and Communications acknowledged that the government was re-assessing its port development priorities. He said the authorities were considering scaling down their plans to develop the La Brea port to focus instead on expanding the port of Point Lisas. Speaking to the Couva/Point Lisas Chamber of Commerce, Bharath said that instead of an integrated project at La Brea, including ship repair and trans-shipment capacity, the authorities might limit work to the creation of a dry docking facility only.

Expansion at Point Lisas, the minister said, would help reduce traffic congestion around Port of Spain. The Point Lisas Port actually is more efficient than the Port of Spain port, but certainly not as efficient as international ports,” Bharath said. “I suspect it is operating at about 40% or 50% the level of efficiency of international ports, so we still have a long way to go with regards to that,” he added.

Panama Canal Expansion

Cadiz told OBG that the expansion of the Panama Canal – expected to be completed in 2016 – creates opportunities for T&T’s maritime industry. He noted that T&T is located at the tip of South America in the sheltered Gulf of Paria. Most ports near the Orinoco and Amazon estuaries cannot accommodate new, larger post-Panamax ships requiring draughts of 15 to 18 metres. T&T can accommodate vessels with 10 to 11 metre draughts, Cadiz said.

A wider Panama Canal would have positive effects on the Caribbean region. “While countries like the Dominican Republic, Puerto Rico or Jamaica will intercept traffic with the US market, T&T is better placed to serve as a platform for business with Latin America,” Cadiz told OBG. Sandra Henry, the head of marketing at PATT, added there may be opportunities for transshipment business in the region.

Outlook

Lower hydrocarbons prices and policy uncertainties connected to T&T’s 2015 elections are having an impact on transport and logistics. Still, the outlook for the sector is positive, and significant investment in infrastructure is either currently moving forward or already in the planning stages. The trends supporting passenger and freight demand are set to continue, and while the next government may reassess some policies, it will be able do so in the context of moderate growth.

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The Report: Trinidad & Tobago 2015

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