UDC resurrects Port Royal plan - Project costed at US$492m
Published:Wednesday | December 4, 2013 | 12:00 AM
Avia Collinder, Business Reporter
The Port Royal Development Company Limited (PRDC), an entity in which five government agencies together have the majority shareholding, is trying to revive interest in the redevelopment of Port Royal as a heritage tourism attraction and cruise ship port.
The project has been lingering for 20 years, but in a new push for funding, the Urban Development Corporation (UDC) is now prospecting for outside investors. Requested proposals for investment and development of Port Royal are due by December 11.
PRDC director Robert Stephens said Monday that the plan's indicative cost is just shy of US$492 million (J$52 billion) and that the project could create 20,000 jobs.
A US$2,000 fee from prospective bidders will provide access to several studies, including an interpretative master plan; architectural drawings to a preliminary design stage; a retail plan; a housing study and a draft business plan, among other documents.
Stephens said the project could be pursued in stages, with returns realised over five years for the first phase, which is a cruise pier costed at US$30 million to US$40 million.
The preparatory plans, he said, are sufficiently advanced for work on the pier to begin in six months.
The master plan, in addition to heritage sites, includes designated areas for restaurants, shops, taverns and sidewalk cafés around Chocolata Hole Bay. Shops are expected to carry a wide variety of goods from the historical periods but will also feature modern boutiques.
All buildings are to be constructed in the architectural style of the 17th century with a two-floor maximum.
The plan also includes a Sunken City Museum which will feature a "virtual reality walk" through the streets of the sunken city. It foresees the rehabilitation of the Portmore Forum hotel at a cost of US$30 million.
Stephens credits the project's revival to current chairman of the UDC, K.D. Knight, who he notes is also chairman of the PRDC. He has been pitching the Port Royal plan since 1993.
A combined 80 per cent of PRDC, which was formed 16 years ago in 1997, is held by the Accountant General, Jampro, National Insurance Fund, the UDC and the Development Bank of Jamaica.
The largest shareholder is the Accountant General's Department, with 43 of 100 shares, according to the UDC.
Stephens said that he is also a shareholder, but the UDC, which provided information on the company on Monday, did not disclose his holdings. Nor was Stephens himself prepared to disclose his interest.
Stephens admits that PRDC owns no land or leases, but says that it has to date invested US$5,000 in research, planning and documentation and has an agreement signed by Government.
Listed among the project goals is providing a gateway for the revitalisation of the historic triangle of Port Royal, Kingston and Spanish Town, as outlined by original consultants on the project - Pragma Consultants.
Pragma is Stephens' company.
Stephens said facilities for cruise ship visits can be developed within a year and that within two years international visitors could be landing at the former haven of pirates.
The largest chunk of the investment - about US$200 million to US$300 million - he indicated will be spent on infrastructure works, and the rest on the restoration of historical sites and the development of retail space.
"We have not significantly changed the plan," Stephens told Wednesday Business, adding that architectural drawings, a master plan, along with research based on sonar and radar examinations of the site will be available to investors.
However, whoever "comes to the table with money" is expected to have an input in the final design of the project.
"Nothing is cast in stone," he said.
The business plan projects a return on investment of 25 per cent or more, based on earnings of US$1 million per day. The plan projects that if the project is successfully executed, Port Royal could be visited by up to 10,000 persons per day by year 2025, Stephens reaffirmed Tuesday.
Alongside the shopping and merchandise centre, cruise port, and other facilities, the plan envisages hotel developments in Kingston could potentially feed some 3,000 visitors to Port Royal daily.
"Down the road, what we see is that Kingston will be developed as a major home port. Visitors will come in for one night and stay and then go on the cruise ship in the morning. What is envisioned are sufficient hotel rooms to fill one megaliner," said Stephens.
Estimates of the deliverables have changed over the years, but these numbers "are fairly current," he said.
Stephens suggested the possibility that PRDC could eventually be divested if an investor is found and the Government determine its participation, as a shareholder is no longer required for the project to be executed.
"The Government is not married to having any shares in the company. They could decide to sell all shares, which would be a matter for Cabinet to decide," he said.
The "anchor" developer/investor will be encouraged to invite public participation in the project, eventually, possibly through an offering of 30 per cent of shares through the stock market, he told Wednesday Business.
The redevelopment of Port Royal as a cruise ship pier and heritage site will see benefits similar to the development of the Falmouth Cruise Pier, but on a more inclusive basis, said the businessman.
"The people of Port Royal will be the first to benefit. We will not exclude them as was done in Falmouth," he said.
The Falmouth Pier was developed by the Port Authority of Jamaica in partnership with Royal Caribbean Cruise Limited.
Jamaica receives approximately 1.1 million cruise visitors per year.
The number spiked to 1.3 million in 2012 with the addition of the Falmouth port. The three largest ports of call are Ocho Rios, Falmouth and Montego Bay.