Infrastructure spending big-ticket item in upcoming budget — Clarke

Infrastructure spending big-ticket item in upcoming budget — Clarke

budget — Clarke US$1 billion in non-borrowed money added to NIR in last four years

BY DURRANT PATE
Observer business writer

Sunday, January 26, 2020

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Finance and the Public Service Minister Dr Nigel Clarke has indicated that infrastructure spending will be one of the big-ticket items in the upcoming 2020 -2021 national budget, which will be tabled next month.

He has identified the south coast highway, linking Harbour View in St Andrew to Port Antonio, Portland, and capital works at the National Water Commission as among the premium items in the 2020/2021 budget. The Government will be spending US$195 million (approximately $3 billion) to undertake road construction works under the South Coast Highway Improvement Project (SCHIP), which entails the rehabilitation of the 14-kilometre stretch of roadway from Harbour View in Kingston to Cedar Valley in St Thomas by China Harbour Engineering Company Limited by way of a three-year contract.

SCHIP is part of the Government's strategic development plan for unlocking the growth prospects on the south coast by connecting Negril, Westmoreland to Port Antonio, Portland via a modern highway system.

Speaking at Mayberry Investment's monthly investors' briefing at Knutsford Court Hotel in New Kingston on Wednesday, Dr Clarke highlighted the infrastructure work that is to come in building out ring roads for a number of Jamaica's townships in the near future.

INFRASTRUCTURE WORK

”You can expect infrastructure work to be accelerated,” declared the finance minister, while pointing that construction showed a slight contraction in the last quarterly economic figures because of the winding down of the legacy road projects, which are almost at an end. He pointed out that the construction sector should see a resurgence with the infrastructure expenditure planned for 2020 - 2021.

He was quick to emphasise that there would be no wanton spending, making the case that it will be business as usual, “with the Government adhering to its own fiscal rules in crafting a budget that is consistent with that”.

The finance minister made an appeal for more public-private sector participation in infrastructure development, arguing that the Government alone cannot finance the infrastructure build-out of the economy.

Referring to the upcoming TransJamaica Highway initial public offer slated for next month, Dr Clarke noted, ”This is one of the reasons we are excited about the emergence of our own Jamaican private asset owner in the infrastructure space.”

He contended that in addition to completing the highway segment from Clarendon to Williamsfield in Manchester, TransJamaica could also find itself being extended to other projects, such as the ring road planned for a number of rural townships.

Turning to the issue of external sustainability, Dr Clarke disclosed that the Jamaican Government has been able, over the past four years (2016-2019), to earn US$1 billion in non-borrowed money, stating that most of the reserves earned in prior years were from borrowed sources.

MACROECONOMIC STABILITY

He told the large audience that because of the economic reforms which have been taking place over the past few years, ”Macroeconomic stability has become entrenched in Jamaica,” arguing that for a long time Jamaica has been externally unsustainable, but this is no longer the case.

The finance minister boasted that Jamaica has overcome external, fiscal and price unsustainability.

“What is significant is that for the last five decades Jamaica has never had price sustainability, external sustainability, and fiscal sustainability all at the same time. This is what makes this time so special, and we must commit and endeavour that come what may we do not lose those elements”, Dr Clarke implored.

In concluding he emphasised,”We have learnt from experience what works and what doesn't”.


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