Cement contract extended
Some time this morning an urgent telephone call will be made from Bermuda to order a fresh cement supply ship delivery for the new year.
Ten days away from a potentially devastating shut down of the Island's only bulk cement supply plant, a stop-gap agreement to stave off a looming cement crisis has been hammered out. It should mean there is no drying up of bulk supplies between now and mid-February.
While it may not be an outbreak of peace between Government quango the West End Development Corporation and the Bermuda Cement Company, the understanding between the two sides will at least mean the construction industry is able to continue working through the new year.
However, the UBP's shadow works and engineering minister Jon Brunson called on Government to stop playing "Russian roulette with the construction industry and the jobs of thousands of workers."
He repeated his call for a six-month "stand down" on both sides so that the Government elected on December 18 can enter negotiations in good faith with the Bermuda Cement Company and any other interested parties.
A joint statement issued late yesterday afternoon by Wedco and the cement company announced that the company has agreed to order a further cement ship to deliver in the opening days of January in return for being allowed to continue operating the Dockyard plant until that cement is sold off — which is expected to be mid-February.
The cement company has also agreed to order another shipment of cement bags from Germany. "As such, any perceived crisis in the supply of cement to Bermuda has, at this stage, been averted," the statement read.
The fresh agreement came only hours after the Construction Association of Bermuda took out a full page advert in The Royal Gazette calling for a solution to the imminent crisis and outlining the crippling effects that would befall the Island's construction industry within a matter of weeks of a supply interruption.
A breakdown in negotiations between the cement company and Wedco last month resulted in Wedco deciding not to extend "good faith" leases of the Dockyard site to the company beyond December 31.
As a result the cement company put itself up for sale and indicated it would close the plant on December 21 in order to remove its equipment and supplies from the site before handing it back.
With no new operator in place, the Island faced an immediate bulk supply shortage.
Lawyer Alan Dunch, who has been representing the cement company, said: "As a result of a Government request that was made through myself to the Bermuda Cement Company we agreed to bring in another shipment of cement, provided we are allowed to sell that shipment."
Mr. Dunch said the shipment would probably be ordered early today with the expectation it will arrive during the first week of January.
"That shipment should see us through until the middle of February," he said, confirming that as things stand the cement company continues to seek a purchaser willing to take a majority share interest in the company.
Government has made a bid to buy the company's equipment and supplies, and that offer remains under consideration as do other offers from interested parties.
Mr. Dunch said he had not seen any evidence during the past few weeks that an alternative plan to replace the cement company had been drawn up.
"If Government had an alternative plan to take effect as of the end of December, Bermuda Cement Company was never aware of what that plan might be," he added.
Bermudian businessman Clifton Lambert has put forward his own proposal to run the plant at Dockyard, and claims to have an in principle agreement with the world's largest cement maker Lafarge.
Mr. Lambert, who runs the newly-renamed Island Cement, has put in a formal offer to Bermuda Cement Company to buy its equipment and supplies and also presented Government with a proposal to operate the Dockyard facility. As of yesterday he had not heard from Government regarding his proposal.
Following the advertisement by the Construction Association outlining the likely effect on Bermuda of bulk cement supplies drying up, Mr. Lambert said he agreed with the Association's belief that trying to get around the supply crisis by importing bagged cement would be highly impractical in terms of cost and logistics.
"We are aware of a local major building material retailer's efforts to import approximately 100,000 bags of cement to the Island, this will provide a very expensive short-term remedy but is not a solution," he said.
The businessman is also aware of "last ditch" efforts by competitors joining forces with small independent cement manufacturers as an alternative to his company, but said: "The logistics of shipping will be their Achilles tendon, it's a difficult challenge and very expensive, additionally, where will they unload these containers?
"Hamilton dock, which is a logistical nightmare? Bulk will always be more economical than bag cement."