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Waugh Construction Tractors Used in Groundbreaking for Freeport Container Port Phase V expansion

Prime Minister Hubert Ingraham traveled to Grand Bahama Thursday Dec 13th to attend the official groundbreaking ceremony for phase V of the Freeport Container Port.

Chief Executive Officer of the Freeport Container Port, G. Chris Gray, gave the following remarks as he welcomed everyone to the phase V expansions ceremony:

Prime Minister, The Right Honourable Hubert A. Ingraham, Cabinet Ministers, Senators, Members of Parliament, Sir Albert Miller – Chief Executive of the GBPA, Nicolas Arena – CEO and Chairman, MSC U.S.A., and Bahamas Senior Executives of GBPA (Sir Jack & Lady Henrietta), E. O. Ferrell – Chief Executive of Grand Bahama Power Co.

Prime Minister, it was ten years ago this past July that you officially opened Freeport Container Port. At that time the facility consisted of just four cranes supported by back-up equipment and land but not too much of an idea where the business was going to come from other than the verbal indication from two shipping lines, established customers at our other facilities around the world, that they would put a couple of services into Freeport to see how it works. In the first year of operation, we handled 197,000 TEU which was in fact quite respectable. Here we are some 10 years later with ten cranes, a forecast this year of 1.6m TEU and with a customer operating 13 services covering some 250 ports worldwide. Not a bad achievement for an island of 50,000 people.

Prime Minister, I understand that there have been quite a few Ground Breaking Ceremonies in the past and that in many cases some 12 months later, the ground is still broken but no concrete has been poured. I am happy to reassure you that you will not experience that problem with us. We have a track record of doing what we say we are going to do (and saying what we mean) as can be demonstrated by what you see around you here today. And Prime Minister we are not going to ask you to break your back digging a hole in the limestone with a shovel – we have lined up two of Sonny Waugh’s caterpillars to do the work for you.

Once Phase V is completed in 2009 our total investment in Freeport Container Port will amount to $585m. Just as a matter of interest here, since finalizing the Phase V project, the cost of our cranes has increased by $0.5m each and the straddle carriers by $50k each, the latter due to the exchange rate USD/Euro. This has added a further $5m to the project costs. (Cost of steel, oil and USD deprecation)

What is most important about today, of course, is the prospect of employment for a further 300 people taking the total employed to 1,200 at a time when the economy of the island is not at its strongest and also when the US economy is not enjoying the best of health.

In addition to its investment in the Container Port, Hutchison Port Holdings also has a 50% shareholding in the Harbour and Airport Companies, including the Sea Air Business Centre, together with Port Group Ltd., a sister company of the Grand Bahama Port Authority.

Since 2002, approximately $50m has been invested in the Airport which includes a new International Terminal, Air Traffic Control Tower and Crash Rescue Building and a further $20m in the Harbour Company which includes the Retail Centre and the latest dredge which is now almost completed.

The Airport requires a further $20m of investment in order to construct a new Domestic and Non-US International Terminal, a new FBO and resurfacing of the Ramp.

The Harbour Company requires an investment of a further $30m in order to rebuild the infrastructure following the damage caused by the Hurricanes of 04 + 05. Much of this additional investment, totaling some $50m between the two companies is required not just due to hurricane damage but as a result of more than 30 years of neglect where monies were not reinvested to protect the asset for the future.

So ladies and gentlemen, just to further clarify something here.

We do not regularly appear in the press, we are fairly low profile preferring to work hard and concentrate on running our business, nor do we normally issue statements every time someone has something to say about us. However, having read certain articles in the local press just recently I would like to take this opportunity to clarify one or two points.

I can confirm that Hutchison has made an offer to acquire the shares in IDC Ltd. Cayman, the parent company of Port Group Ltd. and the Grand Bahama Port Authority Ltd.

The Hutchison Group has no burning desire to run the Port Authority. We happen to believe that as in many other countries, the function of the Port Authority should fall under local Government. We do however believe that a suitable and acceptable structure can be achieved which will satisfy the Government, the Licensees and the community of Freeport and Grand Bahama. We would be fully prepared to work with the Government and all interested parties in achieving this. Certainly there should be no cross shareholding between such a body and private investments. We would also like to see more Bahamian ownership and participation in the affairs of Grand Bahama.

We have no wish to dominate and create a “one company town” as suggested in the press, in fact quite the opposite, we would like to see an increase in inward investment by as many players as possible, whether large or small.

We are however a known and proven entity here on Grand Bahama and with a worldwide record of success.

We read lots of nice warm words about new people coming to Grand Bahama with billions of dollars of investments and how they care for the people of Freeport and its future. That is fine but let us see some action rather than just hearing about how wonderful life will be with their arrival.

Our main objective is simply to protect our interests and significant investments on the island. As I mentioned earlier, further major capital expenditure is required in the Harbour and Airport, some $50m, all of which we are prepared to fund but not under the present arrangement.

All I would say to the parties concerned, who are in fact our partners, is this: The dispute which has already gone on for over a year now, is distasteful, disruptive and destructive. To continue will only serve to enrich the supporting cast. For the sake of the future well being and success of the island, please find a speedy resolution, settle it quickly and get on with your lives, and allow this Island to start to develop and achieve its full potential.

I have also noted comments in the local press about the US having concerns over Hutchison’s presence, or increased presence on the island, due to our supposed connections with the Chinese Government. The Hutchison Whampoa Group, though Headquartered in Hong Kong and listed on the Hong Kong Stock Exchange, is a Global Company employing more than 250,000 people in more than 50 countries around the world and engaged in core businesses of Property, Hotels, Port, Retail, Infrastructure, Energy and Telecommunications.

As an international company it is run by a variety of nationalities, British, Australian, New Zealanders, Canadian, Dutch, Mexicans, Spanish, Italians and so on.

The Hutchison Group has a very strong working relationship with the US Government, especially in the fight against terrorism and in the protection of US Borders and territory. Of the ten megaports serving the US, Hutchison has a major presence in five of them.

The US Government now has a presence and operates its Container Security (CSI) and Megaports Initiatives in 58 ports and terminals around the world. Of those 58 ports and terminals Hutchison either owns, operates or manages fifteen of them such as Rotterdam, Felixstowe, Barcelona, Shanghai, Freeport, Shenzen, Busan (Korea), Buenos Aires and Balboa amongst others. John Meredith, Group Managing Director of Hutchison Port Holdings sits on a Security Committee in Washington consisting of representatives from US Homeland Security and the world’s leading shipping lines and Container Terminal operators.

In a large group such as ours we expect criticism, it goes with the territory as they say. We are however good corporate citizens with a strong track record of success but more to the point we are long term. When we invest in a country we stay, we many not always get everything right first off, but we do remain. I would therefore say to our critics and detractors – when you wake up in the morning we will be here – and when you are long gone, we will still be here.

Back now to today, which marks a very important milestone in the development of Freeport Container Port. With the long term commitment of our customer and joint venture partners: Mediterranean Shipping Company, Freeport Container Port has a bright and secure future.

Container Port Director, Godfrey Smith has already outlined to you the characteristics of the business so I will not elaborate further.

In closing, I would like to pay a special tribute to Godfrey and his all-Bahamian team for their tremendous efforts, loyalty and commitment in ensuring that Freeport Container Port is a success. Godfrey himself, a product like so many of the employees here, of Eight Mile Rock – was an Air Traffic Controller until 11 years ago. I am personally extremely proud of Godfrey’s achievements and I think that all of you, as Bahamians, can also be proud that one of your very own is running the leading Container Terminal in this region – bigger even than Miami.

I would also like to introduce other members of my Senior Management Team: Orlando Forbes, Port Director, Freeport Harbour Company; Philip Carey, Airport Director, Grand Bahama Airport Company; Julian Russell, Financial Controller for all three companies; Malvese Capron, Director of Human Resources for all three companies and last but not least, Raymond Jones, Chief Operating Officer for the 3 companies, thank you Raymond for doing such an excellent job as MC today.

Prime Minister Ingraham, Ladies and Gentlemen thank you for listening to me, but above all thank you for being here with us today on this very special occasion.

I take this opportunity to wish you all an enjoyable and peaceful Christmas with good health and every success in the 2008.