The Cabinet has approved the award of the civil works contract for segment three (Ocho Rios-Port Antonio) of the Northern Coastal Highway Improvement Project (North Coast Highway) to E Phil and Sons A S of Denmark for $5.6 billion.

Segment three of the project is being financed under two agreements made with the European Union (EU), which amount to euro80 million. Both agreements have been extended to June 30, 2009.

Prime Minister P J Patterson, who made the announcement at last week’s post-Cabinet press briefing, said that euro66 million was available directly from the EU source for the contract, while the shortfall is to be provided by the Government of Jamaica.

The current status with respect to land acquisition, the removal of utilities and the resettlement of project-affected persons is between 98 per cent and 99.9 per cent complete, he said. He gave little details of the awardee except to say that the company has done work in Jamaica before.

The North Coast Highway project is a sub-project of the Northern Jamaica Development Programme (NJDP) which was formulated between 1989 and 1990 to effect improvements to, and develop the physical infrastructure along Jamaica’s North Coast.

The principal objective of the programme is to support increasing tourism, population growth and the general growth and development of the corridor.

The project is separated into three phases – segment one, Negril to Montego Bay, with financial assistance from the Japan Bank International Corporation (JBIC); segment 2, Montego Bay-Ocho Rios, with financial assistance from an Inter-American Bank (IDB) loan; and segment 3, Ocho Rios-Port Antonio supported by an EU grant.

But the entire North Coast Highway project has been severely plagued by long delays in completion targets and massive financial overruns.

Construction of segment one started in September 1997 with an original completion date of September 1999.

A Memorandum of Understanding was signed between government and the contractors, Bosung Engineering, in June 2000 which set a completion deadline of December 31, 2000, provided that the project would have started in mid-August. When the project missed that deadline, December 31, 2001 was named as the new deadline, which was then extended to March 31, 2002.

The first segment was eventually completed in September 2002, almost three years behind schedule and with a US$47-million overrun.

The problems of the first leg were a source of embarrassment to the Patterson administration which had promised to learn from those mistakes. However, the government ran into more problems with segment two.

In March, minister of transport and works Robert Pickersgill, answering questions from Opposition MP Joe Hibbert in the House of Representatives, admitted that there had been a US$31.3-million overrun on the cost of the segment, which was initially projected to cost US$60.4 million and was originally scheduled to be completed by June 20, 2004.

Pickersgill admitted that there would be a 17.7-month delay in completion of segment two and put the new completion date at June 2006, two years behind schedule. The projected completion cost is now US$91.8 million.

In January, Pickersgill had suggested that the government had learnt from the mistakes of the first two segments and had taken steps to ensure that the third leg is completed on time and within budget. However, the problems of the first two segments are being carried over into the final segment.

Prime Minister Patterson had promised in November 2003 that the third and final leg would begin in 2004/2005.

In January, Pickersgill promised that the contract would have been signed in June. He also stated that the bidding process would have been completed by February 25 and the evaluation by April.

Patterson said last week that the project was among the matters he would like to see resolved prior to his leaving office. He told the briefing that he hoped to have the final contract signed before the end of this month.