Global Ports Holding has signed a 30-year concession with the San Juan Cruise Port in Puerto Rico. San Juan Cruise Port is currently a popular transit and homeport that needs serious investments to hold its place in the cruise industry.
The agreement between Puerto Rico Ports Authority for San Cruise Port and Global Ports Holding, which is worth $75 million, ensures an additional investment of $100 million towards critical infrastructure projects. A second round of investments could be worth upwards of $250 million.
Global Ports Holding Signs 30-Year Agreement for San Juan Port
Currently, the world’s largest cruise port operator, Global Ports Holding Plc (GPH), has signed a concession agreement for a period of thirty years that will bring record-breaking investments to the San Juan Cruise port. The new partnership will go forward as the San Juan Cruise Port Ltd. (SJCP), bringing up to 425 million dollars in investments.
San Juan is currently one of the busiest cruise ports in the Caribbean but needs serious investments to keep it at the current level. Therefore, the arrival of GPH is welcome news for Puerto Rico and the City of San Juan due to the millions of dollars the cruise port generates each year.
Global Ports Holding Chairman and CEO, Mehmet Kutman, said: “I welcome San Juan Cruise Port into the world’s largest cruise port network. The GPH team looks forward to working in partnership with all stakeholders to refurbish and reinvigorate this leading cruise port to create a world-leading cruise port experience for the benefit of all stakeholders.”
“Our work to transform this port will see hundreds of millions of US dollars invested into San Juan Cruise Port, all financed by private capital. Our plans include building a new cruise pier, a state-of-the-art cruise terminal, and significant enhancements to the public infrastructure.”
As part of the deal, the number of docks currently capable of serving as homeport for four cruise ships at a time will double to eight. Docks battered by hurricanes Irma and Maria in 2017, and which have been worn down throughout the decades, will be modernized.
Not Everyone Satisfied
The new partnership has received significant criticism. With $5 billion worth of infrastructure at play, the initial $75 million investment that GPH is placing into the project seems insufficient.
However, with the state of the docks in San Juan presently, serious investments are needed. Something that the Puerto Rico Ports Authority is unable to do as it is $350 million in debt.
Another problem is that Puerto Rico and San Juan are currently unable to welcome any of the super-large cruise ships with over 5,000 passengers on homeport calls.
What Global Ports Holding will be able to offer Puerto Rico is a return to Pre-COVID numbers of arrivals, something which has proven hard to do, considering the difficult start-up period.
How Much Will Be Invested?
The Puerto Rico Ports Authority will receive $75 million in upfront concession fees from GPH. For an initial investment phase, GPH plans to invest approximately $100 million to repair and upgrade Piers 1 and 4 and the Pan American Pier.
There will be a second investment phase if specific pre-agreed criteria are met, including a return to pre-pandemic cruise passenger volumes. As part of this, GPH will invest approximately $250 million to build a new cruise pier and state-of-the-art homeport terminal capable of handling the largest cruise ships in the world.
GPH will also invest in systems, equipment, and technology to enhance the cruise port’s operational performance and ensure environmental protection, safety, and security.
This fiscal year, officials expect more than 1 million passengers — roughly 80% of pre-pandemic traffic — with eight new cruise ships scheduled to visit the San Juan port for the first time.
Once the investments have been completed, Global Ports Holdings expects San Juan to become the number three cruise port in its network of ports, which include Antigua, Singapore, and Nassau.