By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Arawak Port Development Company’s (APD) potential $45 million private placement is unlikely to take place until the New Year, Tribune Business was told yesterday, with the 31,000 twenty-foot equipment units (TEUs) handled since April putting its container volumes ahead of projections.

Michael Maura, APD’s chief executive, said that with the Government having appointed new directors, the company’s Board was set to meet in two weeks’ time.

Among the issues on the agenda will be the long-awaited private placement, which was designed to replace the Royal Bank of Canada (RBC) bridge financing taken out to finance the Nassau Container Port’s construction.

Mr Maura, though, agreed that the timing, now in the 2012 fourth quarter and with Christmas coming up, meant that the private placement was likely to be pushed back into 2013.

He added that APD’s overall freight volumes were “right in line” with projections, with the BISX-listed port owner/operator seeing container and bulk terminal throughput exceed expectations.

While the break bulk terminal was “slightly behind” budget, and the anticipated 200-300 increase in weekly container throughput from Baha Mar was unlikely to materialise until the 2013 first quarter, Mr Maura said APD was “ahead” of where it thought it would be.

The Gladstone Freight Terminal had “significantly increased” logistics efficiencies for both shipping companies and their private sector clients when compared to the former’s previous Bay Street locations, he added.

APD, which has to-date invested around $75 million of its total spending/construction budget, is set to go ‘out to bid’ within the next 60 days for the building of its 25,000 square foot headquarters and administration building on Arawak Cay.

And Mr Maura also disclosed that Customs was looking at installing a “container scanning portal” on Arawak Cay. This would work much like the cameras on the Florida Turnpike, scanning containers from above as they went through the port, thus improving both processing efficiency and revenue collection.

Confirming that the Christie administration had decided on Board replacements for Anthony Allen and Anton Saunders, Mr Maura told Tribune Business: “What we have been waiting on, and the good news is, that we have a new Board and new directors appointed by the Government.”

The Christie administration has named Michael Turner and Frank Forbes as its APD directors, with David Davis, permanent secretary in the Prime Minister’s Office, the only carry-over from the former government as he has retained his public service post.

“Our first Board meeting is scheduled in about two weeks,” Mr Maura added, disclosing that among the issues on the agenda will be the private placement as well as “the timing of an annual general meeting”.

“I need to have that Board meeting and bring them [new directors] up to speed, and take them from 0 to 60 pretty quickly,” he said, explaining why APD had not moved on the private offering, which had initially been timed to take place before the 2012 year-end.

The private placement, which will be targeted at selected Bahamian institutional and high net worth individuals, is designed to replace the Royal Bank bridge loan that financed the port’s construction with long-term debt.

“Initially, the plan was we would replace that bridge facility with proceeds of the private placement,” Mr Maura explained. “That bridge is $45 million, and that is what it would be. But the Board may decide to only partially take out the bridge facility.”

The majority of APD’s remaining start-up budget is due to be invested in its new head office and administration building. A BEC sub-station at Arawak Cay also has to be constructed.

“We expect to be going out to bid on an administrative building, 25,000 square feet at Arawak Cay, in 60 days’ time,” Mr Maura said.

“We’re doing well. Our numbers are right in line with plan. When we do have our AGM, we would expect to provide very positive news. We’re very happy with the progress in operations.”

While APD had initially anticipated a 200-300 container per week increase from Baha Mar’s construction would materialise by August/September 2012, Mr Maura said this had not happened yet.

“Baha Mar I understand to be slightly behind schedule,” he added, “so we would expect in the first quarter of next year to see the beginning of the Baha Mar volume.”

Apart from boosting Nassau Container Port’s container throughput volumes, the increased Baha Mar-related cargo may help to drive down the various tariffs and fees charged by Nassau’s newly-constructed shipping port.

The port’s tariffs, as per the Memorandum of Understanding (MoU) agreed with the former Ingraham administration, are designed to generate a minimum annual 10 per cent Internal Rate of Return (IRR) from its shareholders. An increase in volume could thus create space for tariff reductions.

And APD seems to be doing just fine when it comes to current business levels.

“From kind of the first day in operation, around the middle of April, through the end of last week, we would be just over 31,000 TEUs, and generally our container freight volume is running ahead,” Mr Maura told Tribune Business.

“Both the container terminal and the bulk terminal are running ahead, and the break bulk terminal is slightly behind. All in all, we’re ahead.

“We do about 20 vessels per week. That’s equivalent to Bay Street and the vessels that were already calling on Arawak Cay. We’re right around the same number, and the volumes on the ships have increased slightly.”

The ‘break bulk’ facility at the Gladstone Freight Terminal was boosting businesses in the western southern parts of New Providence, Mr Maura added, with service providers such as Tropical Shipping and Gladstone Warehouse Services likely to be saying “their efficiency has increased significantly since relocating from Bay Street”.

Disclosing that Bahamas Customs was working with consultants on its Customs Scanning Portal, Mr Maura said it would improve “surveillance, risk management and collection” for the Government’s main revenue generator.

Once the administration building and BEC sub-station were completed in the next nine-12 months, Mr Maura said the Government might want APD to get involved in other projects, such as the development of Family Island ports.