Belize Ports Limited (“BPL”) recently acquired 26,545,984 shares representing 99.50
% of the ownership in the Port of Belize Limited (“Port Co.”). Port Co. was incorporated in Belize on 15 November 2001 as a public limited liability company with the
objective of succeeding the operational business of the Belize City Port which
was previously the responsibility of the Belize Port Authority (a governmental
entity). Port Co. is fully privatized
and has been vested with the assets and liabilities of the Belize Port
Authority (“BPA”) to operate and manage the Belize City Port. Additionally,
under a 35 years lease
arrangement, Port Co. will assume full responsibility for the management and
operation of the Commerce Bight Port. Through
its operation and management of Belize City Port (“BCP”) and the Commerce Bight Port (“CBP”), Port Co. currently handles
approximately 87.5% of the national port business of Belize.
Ownership of The Belize Port Limited
BPL has currently 10,000 shares outstanding. Luke Espat, BPL’s
Chairman, is the majority shareholder with holdings of 8,999 shares. Ten
percent of the issued and outstanding share capital of the Belize Port Limited is granted
to the Belize Bank Limited by BPL as defined by an agreement between the two parties.
The Belize Port Limited
% OF TOTAL CAPITAL
acquired 26,545,984 shares representing 99.50% of the outstanding shares of The
Port of Belize Limited and with these shares the vesting of the assets and liabilities of
the Belize Port Authority and the rights to operate and manage the Belize City
Port and Commerce Bight Port. The Belize Minister of Finance retains one
Special Rights Redeemable Preference Share (the "Special Share"). This Designated Share may be
transferred only to another Government Minister or someone acting on his
behalf. This Special Share in the equity of the Port of Belize Limited gives
the Government the right to appoint two directors, one whom shall be the
Chairman of the Company’s Board of Directors. Currently, the two seats selected
by the Government on the Board of Directors are represented by Mr. Alberto
Mahler (existing Chairman) and Mr. Louis A. Lue
(Advisor for Government of Belize Investments). BPL will have the right to
appoint nine Directors by right of its majority share
The port facilities in Belize City and Commerce Bight were constructed between 1978 and
1981 respectively, financed by a US$ 20 million loan from the Caribbean
Development Bank. The Belize Port
Authority, a semi-autonomous Business Enterprise (quasi-government) was
established under the Port Authority Ordinance No.2 of 1976 to manage, operate
and regulate the ports of Belize. Its business is conducted in accordance with this
ordinance. The Statutory Instrument No. 26 of 1980 sets out the charges which
the Port Authority may levy for its services. Any changes in either the
ordinance or charges specified in the tariff must first receive approval of the
Prior to the privatization in 2002, the BPA under
principal legislation (the Belize Port Authority Act, Chapter 233 of the Laws
of Belize, Revised Edition 2000-the “Principal Act”) carried
out the combined functions of operator, manager and regulator of the ports, performing its duties as provider of a
coordinated and integrated system of ports, navigational aids and port
services. The Principal Act was amended to allow for the privatization of the
operational and management functions of the Belize City Port and the leased Commerce Bight Port, and left the BPA with solely port regulatory
responsibilities. Port Co. was created
to succeed BPA in the operation and management of the Belize City Port, and Commerce under a long-term lease with the BPA. Port Co. was fully owned
by the Government prior to the acquisition of the shares by BPL. The Government
will still retain one “Special Share” in Port Co. as described above.
The two Ports were constructed between 1978 and 1981
and each consist of pre-stressed concrete T-piers, beams and open pile platform
pierheads supporting heavy-duty decks constructed of
steel grate at Belize
City and wood
planking at Commerce Bight. The main pierhead at Belize City Port is located
800 meters offshore and has 67 meters of berths with 5.18 meters of natural
draught. This draught was increased to 10m after a recently completed dredging operation by the
Government. It has a roll-on, roll-off berth of approximately 25 meters
in length and a 4.6 meter draught. A trestle bridge connects the pierhead to
shore. All types of containers can be handled by the port. It is serviced by
one mobile Manitowoc crane with a lifting capacity of 140 tons, two Hyster forklifts with a capacity of 25 and 50 tons
respectively and several smaller Hyster forklift with
five ton capacities and one Super Stacker with lifting capacity of 49.5 tons.
Water can be supplied to vessels by dedicated pipes up to the pierhead.
Containers and break and dry bulk cargo are generally serviced off the
pierhead. The Port has a low berthing facility adjacent to the eastern side of
the trestle bridge leading to the main pierhead with berthing lengths of 60m
and 153m respectively and a draught alongside of 2.39m. This facility is
generally used for local trading between the coastline and Cayes.
The Port also has five mooring buoys which allow tankers to moor offshore in
5.7m of draught and can discharge their cargo via a submersed 8 inch diameter
pipeline. These are owned, operated and maintained by the Esso Corporation. This
facility is used for the import of oil products.
Commerce Bight Port offers a similar layout to Belize City Port but on a
smaller scale. Its pierhead is located 150m offshore and has a berthing space
of approximately 50m with a 7.0m draught. The major cargo handled at this facility
is citrus products for export.
Management, Employees and Facilities
BPL is the Company that has controlling shares of PBL. BPL will have
substantial representation on and control of the Board of Directors of PBL.
BPL will from time to time engage the services of certain professional
port consulting firms on an “as needed” basis. The same will be done for issues concerning port planning and design.
Port Co.’s current workforce at July 2002 was comprised
of 152 employees as well as the CEO, the Chairman and
the Board of Directors. The management function is divided into five areas all
reporting to the CEO. These functional areas include: Piloting, Operations,
Security, Finance/Accounting and Administration and Personnel. The Piloting function is managed by the Chief
Marine Pilot and has seven personnel reporting to it, although the position is
currently vacant. The Operations department is divided into three areas, the
Mechanical, Maintenance and Port Operations sections. The Mechanical section is
led by the Mechanical Supervisor and has ten personnel reporting. This position
is also currently vacant. The Maintenance section is led by the Maintenance
Supervisor who has 16 personnel reporting. Port Operations is headed by the
Operations Manager with the Senior Operations Supervisor reporting to this
role. There are 65 personnel reporting to these senior managers. The Security
Department is led by the Chief Security Officer and has 28 personnel reporting.
Finance/Accounting is headed by the Financial Controller with 11 personnel
reporting. Administration and Personnel is headed by the Administration and
Personnel Manager with 8 personnel.
The Privatization of Port Co.
process of privatization resulted from the Government of Belize (GOB) examining
the effectiveness of its role as the commercial provider of port services in Belize City and at Commerce Bight. It concluded these services
could be better served by fully privatizing the operational and management
business of Belize City Port and entering into a long-term lease of the
Commerce Bight Port. This decision follows a trend in port privatization in the
region by countries to better position themselves to
compete in the regional market. Countries in Latin America and the Caribbean with poor
performance by the public ports have turned to privatization in recent years. By 1998, seven
countries in these regions have transferred control of their port facilities to
the private sector. These countries include Argentina, the Bahamas, Brazil, Colombia, Jamaica, Mexico and Panama.
objectives of the GOB to privatize the port facilities are:
1) The introduction into the company of a strategic
industrial investor whose role will be to provide and
enhance access to capital, strategic advice, access to sophisticated
technology and training, expansion and modernization of the port facilities in
Belize City and Commerce Bight.
2) Improvement in the Belize City and Commerce Bight Port’s economic efficiency in both operating performance
and sourcing of capital to finance extensive improvement and modernization of
the existing facilities.
3) Improvement in port sector services to shippers and
consumers to better meet their individual needs and preferences.
4) Creating regionally competitive port services which
will broaden employee opportunities and increase cargo handling volumes and
5) Participation of the private sector and, importantly,
Belizean citizens in the financial and technical accountability of the port
6) Recognition of the continuous progress of
globalization of shipping and trade resulting in Belize’s more active role in
the integration of international port logistics and, in this respect, assurance
of Belize’s contribution to recent advancement of information technology such
as EDI and e-commerce.
Offering Memorandum 2002 pg. 11
process of the privatization was initiated by the GOB in November of 2000. The
Government placed an official advertisement in the Economist and Beltraide (Belize Trade and
Investment Development Service)
website in November of 2000 inviting submissions of expressions of interest in
the ownership and operation of the Belize City port facilities. Expression of interest was received
by ten parties. These included the Bristol Port Co. (UK), Grace Kennedy &
Co. Ltd. (Jamaica), Lopez Equipment Co. Ltd. (Belize), Port of Barranquilla
(Colombia), Hutchinson International Port Holdings Ltd. (HK/UK), International
Container Terminal Services, Inc. (Philippines/Mexico), P&O Ports
(Australia), Stevedoring Services of America (US) and BPL. A Prospectus dated
January 2002 was released to the interested parties. The GOB Privatization Committee
received and evaluated the bids submitted and a recommendation was made to the
GOB of the successful investor. The criteria applied for the selection are
described in the objectives above. The Privatization Committee was satisfied
that BPL met and/or had the potential to meet the stipulated criteria and the
GOB accepted the recommendation.
The Need for Port Facilities in Belize
and Position of Port Co.
Belize is a relatively small country with an area of roughly
23,000 sq. km. and a total population of approximately 250,000. Agriculture,
Agro-products such as sugar and citrus products and tourism dominates the
Belizean economy. Sugar, bananas and citrus products, marine products and small
manufacturing are the leading export products for the country representing
approximately 33% of the GDP and tourism about 20% in 2001. Currently, the U.S. and the U.K. are Belize’s major trading partners accounting for 54% and 30%
of total exports in 2001. Agro-products and tourism are also the major foreign
exchange sectors of the country. Belize is also highly dependent on imports for a substantial
portion of its domestic consumption. In this light, the Ports play a
significant role in meeting the day to day needs of the economy. It handles 87.5% of the
national port business in Belize. Due to the relative low value of goods exported and
lack of efficient land transport alternatives, sea transport remains the only
viable option. Given the significant
role of the ports, Port Co.’s long-term goal is to develop an efficient, cost
effective, and robust facility to promote economic growth.
A major strategy of Port Co. is to promote the
benefits that Belize has from its inclusion in certain existing trade agreements. The focus
is to establish value-added businesses at the Port to take advantage of these
benefits. Belize is a member nation of CARICOM, a regional common
market, which signed CARICAN. The CARICAN agreement allows for many things
including duty-free access to Canada for many exports.
Similarly, the Caribbean Basin Initiative enacted by U.S. Congress, CBI,
allows all export from Belize (other than specifically excluded products such
as garment and textile) to benefit from reduction or elimination of tariffs to
the U.S.. Port Co. will promote the Ports to local and foreign investors on the
basis of it designation as a Commercial Free Zone (CFZ) and Export Processing
Zone (EPZ). The CFZ was established to attract foreign investments and provides
for various activities including manufacturing, processing, packaging, warehousing
and distribution of goods and services. One of the major benefits includes duty
exemptions for investors on certain products and goods. The EPZ Program is
intended to attract both local and foreign investment to boost production for
export with a focus on manufactured goods and non-traditional agricultural
products and has one major benefit of full import and export duty exemptions.
Port Co. Revenues
Co. derives the bulk of its revenues from the operation and management of the
Belize City Port with some minor contributions from the Commerce Bight Portand other facilities,
and some residual revenue from the privately owned Big Creek Port.
Specifically, the revenues generated by these ports relate to the handling and
storage of containers, cargo dues, docking and mooring fees, as well as a
variety of other labor and service related services. The Belize City Port
contributes 87% of the operational revenues for Port
Co. The largest line items contributions to revenues are from the handling of
containers, and cargo dues which accounted for approximately 48% and 17% of
operational revenues respectively during the last four