First port of call

Guyana begins to level up infrastructure in anticipation of oil and gas boom.

NRG Holdings Inc., a Guyanese joint venture, recently announced the construction of the new Vreed-en-Hoop port: a new terminal to provide the logistical and technical capacity to allow full development of the new offshore oil discoveries in the country. Investment in the project is expected to be in the range of USD 200-600 million and it will become the largest port in Guyana.

NRG is a consortium of local businesses which includes ZRN Investments Inc. owned by well-known businessman and miner, Andron Alphonso; Hadi’s World Incorporated owned by businessman Nazar Mohammed and National Hardware Guyana Limited operated by Nicholas Deygoo Boyer.

Construction of the new terminal could start as early as October and it will take place in two phases to deepen the access channel to the port and to dredge the port basin. The works include land clearing, earthworks, stockpiling, machine operations and concrete.

A senior port designer with knowledge of the project provided more colour, “This new logistics port is very ambitious and has moved very quickly in the last few weeks. It’s not unthinkable that works could begin as early as September or October. It is very much needed as our port facilities are limited to vessels with a draft capacity of seven metres and onsite storage is too small.”

“This new logistics port is very ambitious and has moved very quickly in the last few weeks. It’s not unthinkable that works could begin as early as September or October.”

Senior port designer, Guyana

A local port engineer did not see completion on the short term, “They may do a fifth of the work now to get the ball rolling but then they will take three years to complete the next portion, and so on. That’s the way things tend to work here. Politics will also start to play a role at some point as the government and opposition aren’t entirely in agreement on the project.”

Despite the potential environmental impact of the works, the Environmental Protection Agency (“EPA”) of Guyana announced that the project will not require an environmental impact assessment and, instead, will only need an environmental social management plan to address issues arising during the screening process. The port designer didn’t seem too concerned, “The mangroves might have been an issue but the EPA has granted their approval and made some provisions to protect the mangroves.”

Another potential challenge for the project could be access to skilled labour, as the port engineer highlighted, “It’s important to understand the local operating norms, we don’t have an abundance of true professionals here that will deliver projects to specification. In the past, contractors take a portion of the money upfront and then don’t work to any timeline but their own. Then they are removed from the project and the next contractor does the same, and so on. Before you know it, the project is two or three times over budget and still unfinished.”

“It’s important to understand the local operating norms, we don’t have an abundance of true professionals here that will deliver projects to specification.”

Port engineer, Guyana

A November 2020 report from Insight Crime, an investigative journalism organisation, claimed that the port of Guyana remains a crucial transit point for cocaine-trafficking headed across the Atlantic. The country’s geographically strategic location and lack of border controls make it an attractive smuggling point for criminal organisations. A recent US State Department narcotics control report confirmed that drug-traffickers exploit Guyana’s poorly monitored infrastructure, including ports.

Guyanese authorities expect that the new port will be able to attract oil-related business opportunities that are currently captured by Trinidad & Tobago due to Georgetown’s limited port infrastructure. In addition, NRG Holdings Inc. claimed that the project will employ up to 200 people during its construction process and up to 100 for basic operations at the new facilities. The longer term potential could be much greater than this according to the port engineer, “If they are going to include maintenance of the fleet side, support and the full works then the number of jobs created could increase to 2,000 or 3,000 running on shifts, and that excludes contractors. It is only because of the oil and gas sector that we are even talking about this though, without it our port industry would be dead.”

 

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