Statement by the Minister of Communications Works, Transport and Public Utilities on the Acquisition of Equipment by SLASPA
An article appearing on the front page of the Mirror newspaper, volume 8 No. 30 of Friday April 26, 2002 entitled ‘Corruption :Sir John indicts SLP and calls for investigations’ made reference to the Saint Lucia Air & Sea Ports Authority (SLASPA), calling specifically for an independent review, and also reported that “Sir John was of the view that SLASPA’s acquisitions of certain facilities, including a new crane which he said was being contemptuously referred to as blue boy had not met the test of transparency”. The following are facts concerning the purchase of the crane.
1. Prior to the acquisition of the Liebherr Moblie Harbour Crane (LHM 320) in the year 2000, SLASPA’s Castries seaports cargo handling operations was very inefficient. The cranes which were available for the ship/shore cargo handling operations of the port were an over twenty-five (25) year old second hand P&H (construction-type) crane and a Manitowoc (modified) crane. The P&H crane is a SLASPA-owned crane while the latter was owned and operated by Tropical Shipping through a special agreement with SLASPA
The P&H’s productivity at best was eight (8) container lifts per hour with an average of six (6). The modified Manitowoc was a more efficient crane which could achieve productivity levels of up to twenty (20) container lifts per hour.
The inefficiencies of the P&H crane, frequency of breakdowns, obsolescence and overall cost of maintenance coupled with the operational difficulties and costs associated with the use of the Manitowoc had been creating significant problems for the shipping industry. The potential results could have been increased costs to the final consumer of goods.
SLASPA therefore conducted elaborate analyses to inform the decision to acquire suitable cranage for the port of Castries. SLASPA was also considering the acquisition of back-up cranage for the Port of Vieux-Fort in order to enhance its marketability.
2. Having considered the status of the port’s productivity, the Council of the Air and Seaports Authority granted its approval for SLASPA’s management to invite quotations from qualified harbour crane manufacturers for the acquisition of a new crane for the port of Castries with consideration for cranage for Port Vieux Fort.
3. The reputable manufacturers of Harbour Mobile Cranes (HMC) for container handling operations worldwide are – Gottwald and Liebherr. The other crane manufacturers are Fantuzzi Reggiane (at the time only had five (5) years experience in HMC production), Manitowoc (will modify crane to handle containers) and Caillard (predominantly a gantry crane manufacturer).
It must be noted that the two broad categories of options which were available to SLASPA were to acquire a gantry crane (a highly specialised and technologically advanced crane for dedicated container handling operations) or an HMC. The first option was ruled out because of cost and the fact that it would not have been feasible to accommodate it at port Castries nor would the operations at the port now and well into the future optimise its use.
4. SLASPA having developed the specifications for the crane invited the above named manufacturers to submit quotations. The manufacturers which were invited initially were Gottwald, Liebherr and Manitowoc. Subsequently SLASPA was informed of Fantuzzi Reggiane and Caillard and invited quotations from them.
5. The initial quotations were as follows:
6. Following an analysis of the quotations, the manufacturers, the specifications of the cranes being offered and Fantuzzi’s proposal for the comparable MHC 150, SLASPA short listed Gottwald, Liebherr and Fantuzzi Regiane. Visits at the expense of the named manufacturers were made to their manufacturing plants by a SLASPA team.
7. SLASPA also considered several options and alternative purchase combinations, including leasing options and variations of it.
8. Following a series of negotiations, submissions of revised quotations and comprehensive analyses (price, component parts, specifications, reputation and sustained history, cranage in the region and quality of after sales service), Management recommended to council that SLASPA should negotiate with Liebherr the best package for the acquisition of an LHM 320 for port Castries and an LHM 250 for Port Vieux Fort.
9. Subsequent to this, Fantuzzi Regianne submitted a new offer of US$2,250,000.00 for the comparable MHC 150. The manufacturers and the offers which were considered were as follows:
10. Management again analysed the offers and recommended conclusively to Council that the Liebherr brand should be acquired and that Management should negotiate up to US$2.600,000.00 for the acquisition of the LHM 320.
Management was very strong in its professional assessment that Liebherr had an unparalleled reputation, history and quality of experience to Fantuzzi Regianne who had been in the crane manufacturing business for about five (5) years at that time and that the price differential was not the only critical consideration for the final decision. It was very important to have considered that Saint Lucia already had an LHM crane and had on-island experience in its use and maintenance. Further, in the region, Barbados had recently acquired an LHM 320 and was mindful of Saint Lucia’s experience. Management was also aware that other islands were considering the acquisition of cranes and Liebherr was the most favourable.
11. Management negotiated a final price of US$2,750,000.00 with Liebherr for the LHM 320 inclusive of all critical features and sought Council’s approval. Council again considered and approved Management’s recommendation.
12. The LHM 320 was acquired for $US2,750,000.00.
It is noteworthy to mention that in 1994, SLASPA acquired from Liebherr a much smaller less advanced crane for the Port of Vieux Fort and paid US$2, 900,000.00 compared to the acquisition of the LHM 320 (larger capacity, technologically superior with better features) for a negotiated price of US$2,750,000.00 in 2000.
Further, in 1998, the Port of Bridgetown in Barbados acquired an LHM320 (identical critical features to that which was acquired later for Port Castries) for US$3,920,000.00. Antigua in 2002, acquired an LHM 320 (identical critical features) for US$ 4,900,000.00.
A review of the contract negotiated by SLASPA compared to that which was negotiated by SLASPA in 1994 and that of the Barbados Port Authority reveals significantly better terms for SLASPA’s acquisition of the LHM 320.
This detailed history has been mentioned to indicate clearly that as Minister, and also a member of the SLASPA Council during the period of negotiations for the crane, I remain satisfied fully that SLASPA acted in the best interest of Saint Lucia, with a high level of professionalism and dedication to duty in acquiring the best crane in the industry for the specified purpose. The negotiations were arduous but the results clearly justified the effort.
The shipping and port industries are highly specialised industries and interested media practitioners may find it extremely useful if they seek audiences with the management of SLASPA on these matters before proceeding to prepare and publish articles. I have no knowledge of any acts of corruption in the process of finalizing the sale of the LHM320. It is the duty of any citizen or organization to disclose any such information so that the appropriate course of action can be taken.
I note also that the article in the Mirror made mention of other acquisitions. The public is informed that properties recently acquired by SLASPA were the Art Printery, Gantar’s Bay property, the WIBDECO building, the Vigie Air Cargo Shed and three container handling reach stackers from Fantuzzi.
Hon. Felix Finisterre
Minister of Communications Works, Transport and Public Utilities.
May 08, 2002
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