Despite its relatively small size, Trinidad and Tobago is well placed to become a regional maritime and air transport hub. However, the country has faced challenges in improving its connections to both surrounding nations and wider global markets. On the domestic level, an increasingly diversified economy will require an upgrade of the country’s road infrastructure and internal connectivity in order to facilitate the growth of non-oil sectors such as agriculture and tourism. However, as hydrocarbons revenue has fallen, there has been a reduction in the amount of government resources allocated to infrastructure development in recent years. As a result, the country has taken a more selective approach, choosing to tackle issues of urban congestion rather than launching large-scale projects. While T&T has not chosen to use public-private partnerships (PPPs) to finance its infrastructure, unlike other countries in the region, it has adopted a range of different approaches, including involvement in China’s Belt and Road Initiative (BRI).
Structure & Oversight
The sector is overseen by the Ministry of Works and Transport (MWT), which seeks to provide the necessary infrastructure for the country’s long-term socio-economic growth. The ministry is responsible for roads and drainage planning, the construction of all roads and dams, and the maintenance of government buildings.
According to figures from the Public Sector Investment Programme (PSIP) 2020, formulated by the Ministry of Planning and Development, the proportion of the annual budget allocated to “improving productivity through quality infrastructure” rose from TT$1.4bn ($206.8m) in 2019 to TT$1.9bn ($280.7m) in 2020, accounting for 36.1% of total PSIP spending. This will be used to improve water security, roads and transport links, and ICT infrastructure.
Meanwhile, the Customs and Excise Division, part of the Ministry of Finance, is responsible for the management of Customs processes, revenue collection, enforcement of trade policy and the physical protection of the nation’s borders.
While the country does not currently have a rail network, a passenger service operated in Trinidad until 1968. The line, known as the Trinidad Government Railway, opened in 1872 and connected the capital Port of Spain to the nearby town of Arima, with gradual expansions over the subsequent 50 years. There have been intermittent plans to restart rail services since the early 2000s, with tenders announced in April 2008 for two 105-km express lines from Port of Spain to San Fernando in the south of the island and Sangre Grande in the east.
Although the project was cancelled in September 2010, it was revived by Prime Minister Keith Rowley upon his election victory in 2015. However, the assessment submitted by the Inter-American Development Bank (IADB) in 2016 was considered too expensive, causing the project to be abandoned indefinitely. As a result, the government instead chose to focus on the improvement of road infrastructure.
The construction and upgrade of the country’s roads remains a priority, particularly as the number of new cars continues to rise. Colm Imbert, the minister of finance, told the House of Representatives in May 2019 that over 25,000 new cars are registered per year, with more than 1m vehicles on the road in total. Given that the population was estimated at almost 1.4m in June 2019, this has put significant pressure on the country’s road network.
The MWT’s Highways Division is responsible for managing around 2050 km, or 21%, of Trinidad’s 9592 km of roads. In FY 2019 the government allocated TT$889m ($131.3m) to the expansion and upgrade of roads. In February 2019 Prime Minister Rowley announced that a series of interchanges would be constructed across the country in order to eliminate the need for traffic lights at some of the busiest junctions. This project forms part of the government’s wider initiative for road improvement, known as the Programme for Upgrading Roads Efficiency Unit (PURE). Although it started as a short- to medium-term programme to address the areas of the road network most in need of upgrades, PURE has evolved into a comprehensive scheme to oversee the country’s road strategy for the 2020s. As of January 2020 PURE was responsible for 126 active projects covering a range of areas, including road rehabilitation, slope stabilisation, traffic management and overpass construction.
One major project being overseen by PURE is the TT$221m ($32.6m) Curepe Interchange, which is scheduled to be completed in March 2020 (see Construction & Real Estate chapter). According to a study conducted by the MWT in 2012, the new interchange should reduce morning traffic delays from 11 minutes per vehicle to 19 seconds by 2040.
The Solomon Hochoy Highway Extension to Port Fortin, which will consist of 47 km of fourlane motorway and 2.5 km of two-lane motorway, will serve as an important connection for communities in the south-west of Trinidad. Although construction was halted due to financing issues after the bankruptcy of Brazilian contractor OAS Construtora, the project has since restarted and is scheduled to be completed by the end of 2020. Approximately TT$5.1bn ($753.5m) was allocated to the highway under the previous government, and a further TT$2.3bn ($339.8m) has been set aside by the current administration.
Another important road upgrade currently under development is the 33-km Churchill Roosevelt Highway Extension to Manzanilla. The project aims to boost socio-economic development in this region, with an emphasis on agriculture and tourism – two key sectors for the country’s diversification strategy. Similarly, the upgrade of the Valencia-Toco Roadway hopes to open up eastern Trinidad to economic development, with a particular focus on attracting investment in tourism and residential real estate. The 40-km extension project has an expected completion date of 2021.
As the second-largest English-speaking island nation in CARICOM, T&T has relatively good air connections with its neighbours compared to the rest of the region. The country’s largest airport, Piarco International Airport (POS), is located 30 km east of Port of Spain and serves as the primary hub for the region’s largest carrier, Caribbean Airlines.
The most regular international connections from POS are with New York’s JFK International Airport and Grantley Adams International Airport serving Bridetown, Barbados, with an average of 26 and 25 weekly flights, respectively. As the US is T&T’s largest trade partner, there are flight connections to New York, Miami, Fort Lauderdale, Houston and Orlando. However, economists have noted that connections with neighbouring countries are often not as regular, despite the close proximity. “The country is now better connected with the US state of Florida than with some other CARICOM countries,” Marla Dukharan, Caribbean economist and advisor, told OBG. “While there are advantages to being well connected to the US, there are also many benefits to retaining better links with our Caribbean neighbours.”
This is part of a wider trend of irregular air connectivity that can be observed across the entire Caribbean (see Regional Relations chapter). Internally, there are an average of 144 flights per week between POS and Tobago’s Arthur Napoleon Raymond Robinson International Airport (TAB), located 11 km from the island’s capital, Scarborough. This route accounts for 38% of departures from POS. Between January and August 2019, 695,817 seats were reserved on this route, accounting for 89% out of a total of 782,086 available, according to the 2020 budget statement.
Trinidad’s only international airport, POS, was most recently refurbished in 2009 for the Summit of the Americas and, as such, there are no immediate plans for terminal expansion. However, a 2018 government report suggested that a new air traffic control facility would be required in order to handle growing traffic, in addition to increased operational space to accommodate larger, wide-body aircraft. The airport currently has a capacity of between 10 and 15 traffic movements per hour. The site’s owner, the Airports Authority of T&T, launched the Piarco AeroPark, the first airport city in the Caribbean region, in June 2014. The mixed-use business park, located adjacent to POS, contains retail units, warehousing, hotels, commercial real estate and aviation-related services, among other facilities, allowing the airport to diversify its sources of income by reducing dependence on passenger numbers and aircraft traffic.
Tobago’s only airport is one of two international airports in the country and largely serves inter-continental destinations, bringing tourists to the island. A large amount of passenger traffic is made up of visitors from London, served by UK carriers British Airways and Virgin Atlantic, and Frankfurt, served by German leisure airline Condor, though the frequency of flights varies depending on the season. Flights are generally routed via another Caribbean island, such as Antigua, St Lucia or Barbados. Flights from TAB to New York are also operated by Caribbean Airlines.
As TAB largely serves international traffic and plays a crucial role in supporting the island’s tourism industry, plans are under way to remodel the airport’s infrastructure by building a new terminal building, providing additional car park spaces and improving access for wide-bodied aircraft. The new terminal, which will be located adjacent to the existing airport building, has required extensive construction work and several compulsory purchase orders, allowing the state to take possession of private land in return for compensation. According to the notice issued by the National Infrastructure Development Company (NIDCO) in September 2019, all land must be vacated by February 2020. During the project’s initial procurement phase in 2018, it was estimated that the new terminal would cost TT$550m ($81.3m) in addition to land acquisition costs. According to the 2020 budget statement, the government had received a “satisfactory bid from an international contractor”, and the project would begin in early 2020 and be completed by mid-2021 at the very latest. However, details of the contractor were not specified. In January 2020 local media reported that NIDCO had taken out a $300m loan from Canada’s Scotiabank to purchase the land surrounding the airport, and the organisation was currently negotiating with 56 landowners who will be affected by the new terminal.
Shipping is an important part of the country’s logistics ecosystem, with the two islands located less than 2200 km from the Panama Canal. Approximately 600,000 twenty-foot equivalent units (TEUs) of cargo is transported between T&T’s two main ports, Port of Spain and Point Lisas, per year. Port of Spain covers around 142 ha, with 61 ha dedicated specifically to cargo operations, and has a capacity of 700,000 TEUs. The port is 100% government owned and operated. Point Lisas, meanwhile, is run by the Point Lisas Industrial Port Development Corporation (PLIPDECO), which the government owns a 51% share in, with the remaining 49% held by private shareholders including banks, insurance companies, financial institutions, company employees and the general public. In addition to the 23-ha port, PLIPDECO owns the 860-ha Point Lisas Industrial Estate, which houses over 103 tenants including a steel plant, methanol and ammonia producers, light manufacturers and service companies.
The two islands are connected by sea bridge, with regular passenger and vehicle ferries between Port of Spain and Scarborough. Some 360,734 passengers and 117,524 vehicles made the four-hour journey between January and August 2019. Similar to inter-island air travel, the route has experienced capacity constraints in recent years. To address this, a new ferry – the Jean de La Valette – was added in July 2019. Two additional fast ferries are expected to be delivered in mid-2020 from Australian ship-building companies INCAT and Austal.
In order to further boost capacity, a new ferry port is under construction on the northern coast of Trinidad at Toco, which will be overseen by NIDCO. The authorities hope that the new port will offer a faster alternative sea route between the two islands and boost economic growth in the Toco area. The project is estimated at TT$750m ($110.8m) and will be awarded through a design-build contract, to be completed in 2022. The port will also provide safer berthing for fishing vessels and offer improved maritime facilities such as port administration and coastguard bases.
The cargo shipping segment has been affected by the recent introduction of new standards under the International Maritime Industry (IMO) 2020 regulation on low-sulphur fuel usage. Although this may prove positive for the country’s liquefied natural gas industry in the longer term, sector players have argued that its immediate enforcement may result in a period of adjustment for maritime cargo operators. “In the medium term the IMO 2020 regulation could significantly increase the cost of imported goods not only in T&T but also globally,” Ashley Taylor, president of PLIPDECO, told OBG. “Many refineries in the region are not geared towards the production of low-sulphur fuel.”
In the short to medium term cargo operators have also faced challenges due to a lack of foreign currency, which has affected the segment considerably given that the majority of freight transportation and shipping is conducted using US dollars. In particular, this has disproportionately hindered small and medium-sized enterprises that do not have the network needed to access foreign currency. “Some companies have to wait between two and four weeks to obtain currency,” Karel McIntosh, owner of local freight shipping firm Oceanaire Agencies, told OBG. “This has caused the flow of cargo to be disrupted,” she added.
Although logistics operators are somewhat limited in their ability to assist clients with currency exchange issues, there are some measures that have been implemented to offset these challenges. “Operators have started to introduce new fees that include a currency adjustment factor to cover the cost of foreign exchange,” Peter Patience, director at freight forwarding firm Cargo Consolidators Agency, told OBG. Some countries have also signed agreements with foreign governments to conduct deals using the local currency in order to avoid costs.
As the e-commerce segment continues to expand, many import channels have become saturated, which has particularly affected air routes. Sector stakeholders have argued that the rise in consumer goods imports has caused significant air traffic congestion, with carriers such as Caribbean Airlines increasing the number of flights to the US in order to match international cargo demand.
In order for the country to develop as a regional transport and logistics hub the Customs processes will need to be improved. Some business leaders have pointed to the slow turnaround of documents as a significant hindrance to conducting imports in T&T, which are already under pressure due to a lack of foreign currency. Although steps have been taken to improve Customs processes, delays remain, which may deter potential trading partners.
“While the rotation of Customs officers every six months is positive in terms of transparency, this can affect the interpretation of rules and often slows down procedures,” Patience told OBG.
Given the high rate of car ownership, the country’s public transport network is relatively limited. Land public transport is operated by the Public Transport Service Corporation (PTSC), a state-run agency. The former Trinidad Government Railway line was converted into the Priority Bus Route, a fast-track lane that can only be used by public buses, maxi taxis (small, privately owned minibuses) and other authorised transport such as emergency vehicles. The route runs from Port of Spain to Arima.
In 2018 the government purchased 18 new buses and introduced a further 25, which were scheduled to begin operation in December 2019. The new vehicles have accessible entry and are powered by natural gas. In the 2020 budget statement the authorities outlined plans to procure 300 additional buses of a similar design. Meanwhile, in October 2019 Edwin Gooding, chairman of the PTSC, announced that a new bus terminal would be constructed in Scarborough, as the existing site was deemed unsafe. Gooding also stated that the authority awarded a contract for 22 new buses in Trinidad and three in Tobago, which are scheduled to be delivered in January 2020.
Financing & Investment
Although infrastructure financing in T&T has largely been limited to the public sector, interest in PPPs has grown in recent years. In February 2019 Camille Robinson-Regis, the minister of planning and development, announced that the government was actively looking into using the PPP model to finance large-scale projects (see Construction & Real Estate chapter). Similarly, the country is increasingly cooperating with international development banks to expand its infrastructure capacity. In August 2019 the Ministry of Finance signed an agreement to provide $200m in free availability financing from the Development Bank of Latin America (Corporación Andina de Fomento, CAF). The funding was allocated to the development, rehabilitation and maintenance of roads, to be channelled through the MWT. This was the third loan the CAF has given to T&T since 2016, bringing the total to $800m.
In light of changing dynamics in the region, Trinidad is one of 10 countries in the Caribbean to have signed up to China’s BRI, a network of road and maritime trade routes connecting East Asia to Western Europe, with Latin America and Australasia also included in the network. In May 2018 Prime Minister Rowley signed a memorandum of understanding with China’s President Xi Jinping to strengthen the relationship between the two countries, with Prime Minister Rowley announcing that T&T is willing to participate in the BRI as part of wider plans to develop cooperation between China and the Caribbean region.
Although only a small number of projects have been launched as of January 2020, the majority of Chinese-backed initiatives are focused on industry, telecommunications, health and energy. Nevertheless, the transport sector has benefitted from the partnership. As part of the BRI, a $500m dry-dock development was announced in March 2019, and will be located in La Brea in the south-west of Trinidad. The facility will be constructed by NIDCO, in partnership with the China Harbour Engineering Corporation (CHEC). Although CHEC already has a strong presence in the region and in Port of Spain, the dry-dock, set to be completed in 2022, will be the company’s first major project in T&T. As traffic in the Panama Canal grows, nearby ports such as La Brea are well positioned to receive more business from maritime operators. The port should also benefit from a boost in offshore gas activity, as well as an increase in maritime traffic due to strong economic growth predicted for 2020.
At the same time, T&T’s involvement in the BRI has resulted in growing debts. The value of Chinese loans rose from TT$2.2bn ($325m) in 2018 to TT$6.2bn ($916m) in 2019. “Further engagement between T&T and China should be done with care, as there is a perception that it could weaken transparency,” Dukharan told OBG. “Borrowing from development banks such as the Caribbean Development Bank and the IADB ensures higher procurement standards and narrows the possibility for corruption practices.”
T&T’s small size and strategic location in the Caribbean makes it well positioned to serve as a regional transport and logistics hub. While government oversight in the form of infrastructure investment will remain crucial, the role of private operators will also form an important part of the sector’s development. The ongoing efforts to improve and expand the road network will prove crucial to boosting socio-economic growth in rural areas and, as a result, enhancing the county’s wider diversification strategy.
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