Global Ports Wins San Juan Port Concession with $425M Investment
The Puerto Rico Ports Authority completed its competitive procurement process by selecting cruise port operator Global Ports Holdings for a 30-years concession to operate the San Juan Cruise Port. As part of the agreement, the company which has made its strategy to focus on cruise terminal operations will undertake a significant upgrade of the facilities in San Juan.
The San Juan cruise port is a strategically important port in the Caribbean cruise market, both because of its location and because unlike many ports in the region it is also a homeport. San Juan has good commercial airplane connections to the United States which helped it to emerge as early as the 1970s as a homeport in the Caribbean for the developing cruise industry. It continues to play that role allowing the cruise lines to develop week-long itineraries reaching into the southern Caribbean.
Before the pause in cruise operations during the pandemic, approximately 20 percent of the passengers passing through San Juan were boarding or disembarking cruises with the others being day visitors. In 2019, Puerto Rico reported 1.8 million unique passenger visits or a total of 2.2 million counting all boarding and disembarking passengers. Approximately 400,000 passengers were San Juan homeport passengers.
San Juan becomes the third largest port operation in Global Port Holding’s portfolio. The company also operates the cruise ports on Antiqua and Nassau in the Bahamas.
GPH expects to commence operations of the facility early next year subject to the satisfaction of the closing conditions, including financing conditions. The company was selected as the winner of a competitive procurement process managed by the Puerto Rico Public-Private Partnership Authority for the concession of the cruise port.
Under the concession agreement, GPH will pay an upfront fee of $75 million to the Puerto Rico Ports Authority and invest $100 million in improving port facilities and infrastructures. The initial investment phase will primarily focus on critical infrastructure repairs at piers 1 and 4 and Pan American piers as well as upgrades of the terminal buildings and the walkway.
The company has also committed to investing an additional $250 million in a second phase that will involve expanding the capacity of the cruise port by building a new cruise pier and state-of-the-art homeport terminal capable of handling the world’s largest cruise ships at piers 11 and 12. The company plans to finance the investments through private capital.
Apart from investing in the infrastructure for the San Juan Cruise Port, GPH says it will also invest in modernizing the cruise port experience for cruise passengers, cruise lines, and local vendors. Announcing their win, they said they would use their global expertise and the operating model of the company to improve the management of the cruise port’s operations. The company will also invest in systems, equipment, and technology to enhance the port’s operational performance and ensure environmental protection, safety, and security.
“The addition of this fantastic location to our cruise port network marks a further important step in our growth strategy and will grow cruise passenger volumes across our network to over 16 million passengers per annum,” said Mehmet Kutman, GPH CEO.
San Juan marks the company’s third port win in 2022, At the beginning of the year, they announced an agreement with Tarragona in Spain and later agreements in the Canary Islands. The growth of the company and its position as the leading operator of cruise terminals also attracted the interest of the MSC Group which considered by decided not to proceed with an offer to acquire Global Ports.