Polaris invests despite licence uncertainty
The company that operates Bermuda's only cargo dock continues to invest heavily in its operation despite “staring down the barrel” of the end of its operating licence, its chief executive officer said.
Warren Jones is CEO of Polaris Holding Company Ltd, the parent company of Stevedoring Services Ltd, which operates the Hamilton docks.
SSL's exclusive operating licence for those docks expires in February 2021.
When the current five-year licence was issued by the Corporation of Hamilton in 2016, it advised SSL that rather than rolling over the contract, as had happened in the past, a request for proposal would be issued for the next contract term.
That RFP was to have been issued by the Corporation in March 2019, with the successful bidder to be notified in February 2020, a year prior to the expiration of SSL's licence.
Mr Jones said SSL was later advised by the Corporation that the RFP would not be issued in March, but has heard nothing since.
While the company's operation of the docks beyond February 2021 is uncertain, Mr Jones said the company recently purchased a new $2.32 million Manitowoc crane, and is reconditioning its 13-year-old Terex crane at a cost of more than $250,000, giving SSL access to a third crane.
This, Mr Jones explained in the company's most recent annual report, “will reduce service downtime and allow for critical work to be carried out on the cranes without being influenced by the weekly shipping schedule”.
This week, Mr Jones added: “We are a monopoly, but we make a point of not taking advantage of our customer. Every year, we have invested in improving our operation. We recently purchased a new $2 million crane. We are looking down the barrel of the end of our contract, and that is not a purchase you would normally make.
“But we are in a unique position — we operate Bermuda's only cargo port. If we don't take these steps, and the equipment suffers and we aren't able to provide service, the country suffers because there is no other way of getting goods into Bermuda. We are taking those risks to meet the needs of Bermuda.”
While the expiration of the licence might seem a long way off, Mr Jones said that a transition period from one operator to another, if it happens, would take time.
The company owns the equipment and cargo tracking system that is required to run the port.
Mr Jones said: “What happens to that equipment? We would need time to make decisions about what to do with it. If anyone else comes in to operate the port, they will have to supply all those things.
“You can't just stop today, and the other company starts running tomorrow. All the equipment has to come out. That's not a day, or even two days. Their equipment would have to be moved in, and installed. How does that occur, and the port continues to operate and receive cargo?
“In the meantime, we continue to invest and do what we need to do. We don't have any choice. If we don't provide good service, then it's an argument to replace us. In order to provide that service, we've got to keep investing in a very expensive industry.”
Polaris's annual report for the fiscal year ending March 31, 2019 shows that SSL moved 37,425 20-foot equivalent container units during the 12-month period, deriving $9.42 million in revenue from their discharging and backloading.
Polaris, the holding company for SSL, East End Asphalt Company Ltd, Mill Reach Holding Company Ltd and Equipment Sales and Rentals Ltd, reported a net profit of $801,000 for the same period.