Project pipeline packed with investments
INVESTMENTS flowing from overseas last year were six per cent higher than the year before.
But new projects initiated in 2011 and those already in the pipeline are set to boost foreign direct investment (FDI) into Jamaica over the next few years.
A UN body reported yesterday that the country's FDI inflows increased from US$228 million in 2010 to US$242 million last year, but the value of greenfield (new) projects rose from US$23 million to US$491 million over the corresponding periods.
JAMPRO's President Sancia Bennett-Templer attributed a significant part of the inflows last year to the US$288-million purchase of 40 per cent of Jamaica Public Service Company (JPS) by Korea East-West Power Company, while the document, called the World Investment Report, included the US$9 million spent by China to purchase sugarcane plantations in Jamaica.
"It should be noted that, as has been the trend over the past few years, the levels of FDI inflows being recorded globally is largely driven by mergers and acquisitions being undertaken by multinationals," Bennett-Templer said. "Unfortunately however, the second type of investments — greenfield investments, which are new investments into a country, and an area in which Jamaica has traditionally seen the majority of its investment — is still lagging in its global recovery post-crisis."
Capital investments have followed these acquisitions by foreign companies.
China's Pan Caribbean Sugar has already committed to constructing a US$150-million factory at Monymusk in Clarendon, upgrading its Frome factory in Westmoreland, completely changing out its rolling stock within two years, and planting out cane over a further 6,700 hectares of land (adding to the existing 10,600 hectares), as well as changing out all of its cane by 2017, as part of its goal to get better crop yields.
It claims it already spent US$60 million upgrading its factory at Monymusk, adding new vehicles to its rolling stock — including tractors, loaders, harvesters, and trucks — and developing cane fields since it acquired the Government's last three sugar estates — Bernard Lodge in St Catherine, Frome in Westmoreland and Monymusk — in 2010.
Similarly, JPS will this year commence a US$600-million, 360-megawatt (MW) buildout of its generating capacity using liquefied natural gas (LNG).
JAMPRO Chairman Milton Samuda said that the light and power company also has a five-year programme to build a US$475-million, 100-megawatt petcoke fuel plant as the second phase of its LNG project.
Moreover, JPS will be constructing a US$33-million, 6.3MW-hydroelectric power plant in St Elizabeth.
The UN report identified a US$282-million investment by LIME among the greenfield projects in Jamaica, along with a US$100-million investment in water transportation by a French company that would yield 1,000 jobs, likely in construction.
Details of the capital expenditure attributed to LIME was still not clear up to press time, but international shipping company CMA CGM last year signed a memorandum of understanding to refurbish and expand a section of the south terminal of the Port of Kingston to accommodate its mega vessels in by 2014.
The ICT sector still had a big pull in 2011, when India-based Hinduja Global established a call centre and Convergys announced it would build a call centre this year to accommodate 1,000 employees.
At yesterday's launch of the report, Samuda said that the tourism industry was also set to benefit from a number of developments, such as the expansions of the Fiesta Hotel Group and the construction of another property in the Riu chain.
"Both projects are valued at over US$250 million and are anticipated to generate approximately 3,250 jobs."
The Government is also trying to fast track major investment projects, having established an independent oversight panel to strengthen the existing monitoring framework of three major infrastructure projects — the North South Link of Highway 2000, the Gordon Cay Container Transshipment Hub and the Fort Augusta Container Terminal.
China Harbour Engineering Company signed the concession agreement to fully fund the US$600-million North South link, two weeks ago, and plan to build the toll highway, which will connect Kingston to St Ann, within three years.