Railway to profitability

By Balford Henry
Observer senior reporter

Friday, February 21, 2020

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THINGS are chugging along nicely for the Jamaica Railway Corporation (JRC), according to the Estimates of Expenditure tabled in the Gordon House by Finance and the Public Service Minister Nigel Clarke recently.

The rail service — with its staff complement of 51 — is projecting a net profit of $61.7 million for 2020/21, an increase of the estimated $20.2 million projected for the 2019/20.

The increased profitability is attributed to the user rights granted to West Indies Alumina Company (WINDALCO), which operates a freight service along a section of the track. This arrangement has been in place since December 1990.

To maximise the economic use of the rail, efforts will continue towards facilitating the rehabilitation of a viable rail network from Kingston to Montego Bay for passengers, freight, as well as heritage tourism.

The JRC will also continue to pursue initiatives to improve the management of its extensive real estate portfolio with a view to increasing the overall return on assets.

The path to profitability is somewhat similar to that of former transport minister, Mike Henry's call for a multi-modal transport system to help drive the economic development of Jamaica.

“This is a just-in-time world. That means if the economy is to survive it must get its goods and services right away. Jamaica offers the connection of road, rail, sea, and air. I'm going to connect rail and sea and air,” he was quoted in a 2016 release as saying.

The minister noted that both international airports are at sea level and with the threat of global warming, the impact of climate change and rising sea levels, pose serious threat to them.

He, therefore, concluded that the Vernamfield airport project (in Clarendon), takes on added significance.

The JRC's fillip is in stark contrast to the State-owned Jamaica Urban Transit Company (JUTC), which is projecting close to $6 billion in losses this year.

In 2019/20, the JUTC received government subventions totalling $6.6 billion, and in 2020/21 it is set to receive another $5.3 billion in these subventions. In addition, the company plans to reduce its staff from 2,168 to 2,034 in 2020/21.

It says its operational plan assumes total passenger carry of approximately 50 million, compared to the 41 million projected for 2019/20, an increase of nearly 10 million passengers, from an average roll-out of 391 buses daily.

In order to make that target, the company is also promising to: enhance its fleet management and bus tracking system to provide real-time information to assist with efficient decision-making and service delivery; improve fare collection system to support the efficient collection of revenues; and increase the fleet by 50 new buses, as well as refurbishing 15 damaged ones; and introducing an oil filtration system (OFS) in 300 buses aimed at improving the efficiency and operational life of the bus engines.

At the same time, the company's twin, the Montego Bay Metro Limited, has projected a loss of $146.2 billion for 2020/21, after $54 million in government subventions in 2019/20.

The Jamaican railway originated as a private and comparatively small undertaking in 1843, when the Smith Brother (William and David) proposed to construct a rail system, which was favourably received by the House of Assembly. Construction commenced in 1844 under the name Railway Company.

The Jamaican railway system was the first railway opened to traffic outside Europe and North America, and the second British colony after Canada, only 20 years after operations in the United Kingdom.

Its major role, initially, was the mass transportation of goods and people. The subsequent railway track extended throughout the island, allowed more access to the fertile interior areas where the agriculture industries need support, which effected closer social and economic integration and extended domestic markets.

The discovery of bauxite deposits in the 1940s brought about the relative need to utilised the railway as the preferred mode of transporting bauxite extract to be processed and shipped.The Corporation's train service was suspended in October 1992, but resumed in 2011 with a limited passenger service covering Spanish Town, Bog Walk, and Linstead in St Catherine. The resumption of limited passenger service was discontinued on August 12, 2012.

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