Gov't expects US$500m from private sector partnerships
GOVERNMENT expects to earn over US$500 million from partnering with the private sector in operating it air and sea ports.
The transactions aim to save the cash-strapped government capital expenditure on these assets. These include the Norman Manley International Airport (NMIA), Kingston Container Terminal (KCT) and Port Community System.
The government expects to earn from taxes, concession fees, capital expansion works. It also expects greater technology transfers and efficiencies from the transfers.
The assets would be transfered via Public/private partnerships which are government services or ventures operated by the private sector. Among the types of PPP projects that are commonly provided are roads, utilities, buildings, schools, and hospitals.
"Based on our financial modeling and forecasts it is possible to realise capital investments amounting to in excess of half a billion US dollars over the concession period when all of these are combined," indicated finance minister Dr Peter Phillips in his address at the public/private partnership conference held at Jamaica Pegasus Hotel in Kingston on Thursday. "For example the privatisation of KCT is expected to stimulate economic growth — not just in the investment — but the further development of Jamaica as a logistic centre of the Caribbean."
The conference held under the theme 'Delivering Growth by Partnership - Sharing UK Capabilities in PPP' was held in association with the Development Bank of Jamaica (DBJ) and UK Trade and Investment.
The DBJ has a unit in place charged with the selection and implementation of PPP projects--supported by the Ministry of Finance.
"Our purpose in the Ministry of Finance is to ensure that there are no particular unforeseen contingent liabilities or even seen contingent liabilities which flow to us," explained Phillips to a group of power suit stakeholders.
The interAmerican Development and the World Bank and IFC and Canadian International Development Agency have all committed grant funding to support further development of PPPs, added Philips.
Phillips listed the Sangster International Airport as a positive case study for PPPs in Jamaica.
"We have had experience on both sides of the balance sheet here in Jamaica," Phillips indicated. "We have had some unsucessful ones. The original sugar privatisation is one example. We have had an experience with Air Jamaica. All of which have acurred debts that we continue to service. So its important this time around that we get it right. We cannot afford any contingent liabilities whether from improperly conceived or poorly executed PPPs."