Davies: NMIA could be in private hands by mid-2015
MINISTER of Transport, Works and Housing Dr Omar Davies says if all goes according to plan, the Norman Manley International Airport (NMIA) will be in private management by mid-2015.
Making his contribution to the 2014/2015 Budget Debate yesterday, the minister assured that the privatisation of the airport remains a priority in order to address significant deficiencies in the physical plant, and to put the NMIA in a position to meet the requirements of its licence under the Airport Economic Regulations (2002) Act.
He said that the Development Bank of Jamaica (DBJ) as the Secretariat, and the International Finance Corporation (IFC) as the financial advisors, have been pursuing the privatisation of the airport. The minister further noted that the property of the NMIA will continue to be in the ownership of the Government of Jamaica and dredging will be part of the negotiations.
"The companies have been asked to submit either a plan to take that in, which would clearly affect the fees," Dr Davies told the House of Representatives, noting that there are varying assessments of the cost.
He said that Government will also be meeting with potential investors to outline its objectives for the railway. He reported that the enterprise team has been in discussion with two companies, Herzog Contracting Corporation and Railmark Holdings Limited, which had submitted Expressions of Interest in the Public-Private Partnership (PPP) for the operation and management of the railway.
Both companies have since met a March 31, 2014 deadline for the submission of a detailed proposal for the Jamaica Railway Corporation (JRC), while a third, which subsequently expressed an interest, was asked to provide evidence of its capability to invest in the entity.
The minister said that the matter of the JRC divestment is complex, noting that the demand for passenger travel by rail is down; there are problems with the bridge across the Sandy Gully; as well as problems with squatting on the extensive real estate owned by the company. He said that while the Government is proceeding with investment talks, it is also in the process of conducting pre-market due diligence for sections of the railway that are deemed commercially viable, such as the lands.
"This approach is necessary, in the event that a suitable partner is not identified, to restore the entire rail network, and the Government decides to pursue the alternative strategy of extracting greater value from a break-up of the JRC's assets," Dr Davies explained.