THE Shipping Association of Guyana (SAG) has described the $100M allocated in the 2014 budget to advance the required technical and other assessments which support preparatory works for capital dredging of the mouth of the Demerara River as a highly welcome development.

SAG President Desmond Sears said yesterday that the Association views this development as an unambiguous sign of Government’s commitment to engage in port activity and development. He said the upgrade was an absolute necessity, especially because Georgetown is the hub of all import and export activities.

“Over the past two years, there has been a lot of agitation done to encourage the Government to be involved in deepening the harbour,” he said. “So this is a first step.

“SAG welcomes this initiative in the form of the allocation. We are very happy that we are moving from talk to action,” he concluded.

In rationalising the allocation on Monday, Finance Minister Dr. Ashni Singh concurred that there is urgent need for deepening the channel at the mouth of the river. He said: “The urgent need for capital dredging of the mouth of the Demerara River has been the subject of considerable attention from our Government and from the private sector, affected by its implications for shipping access to the river channel.”

The depth of the channel basin, he acknowledged, has been reduced to an unsatisfactory level, which has resulted in limitations in the draft of vessels able to transit the route. The consequence has been reductions in the volume of cargo being moved per vessel, and increased freight costs.

Dr Singh disclosed that Government would establish a special-purpose entity to address this matter this year, and would work closely with the private sector during 2014 to attract the necessary financing for commencement and successful execution of this endeavour.

Noting yesterday that the Demerara River Channel has, in recent years, been getting increasing shallower due to heavy silting from outflows from the Amazon River, Mr Sears said the SAG would like to see the depth of the channel increased from what currently obtains at between 4.5 and 5 metres to at least 6.9 metres. Moreover, he said, there would have to be steady maintenance.

He said the SAG estimates capital dredging would cost between US$9M and US$10M, but he also said there were financial institutions that loan monies for port development at low interest rates. Those monies, he said, could be recouped through a port development surcharge.

He said this was one model which could be pursued, since the charges would be offset by the savings to importers and exporters resulting from the increased efficiency of the port.
“With a deeper channel, vessels will be able to bring in more containers at the same cost to the importer. Similarly, vessels leaving with exports will be able to take out more containers in one shipment,” he disclosed.

“There will be better value for exports going out, and lower costs for imports coming in”, he said, as he stressed that such a situation would yield rich dividends, and bolster the national economy.

He also added that the dredging would lead to more ships coming in. “Ship owners would not have to fear that their ships will run aground, or be damaged, or that they will be stranded for hours waiting for the tide,” he said.

(By Clifford Stanley)