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News
February 24, 2007

Is Highway 2000 stopping investment in JRC?

After arrangements with an Indian company, Rail India and Economic Services (RITES) for the sale of the Jamaica Railway Corporation (JRC) fell through in 2003, the Jamaican Government again brokered a deal, this time with the Chinese Government in 2005, for the restitution of railway service in the island.

But there again appears to be uncertainties and a humbug in concluding the JRC privatisation deal, leading to speculations that operations of Highway 2000 preclude a competing passenger railway service.

All efforts to get clarifying statements from either the Ministry of Transport or TransJamaican Highway, operators of the Highway 2000, were unsuccessful.

Under the 1999 Memorandum of Understanding with RITES, the Jamaican Government would own 40 per cent of the JRC, RITES would hold 30 per cent, and other local companies would own the remaining 30 per cent.

In 2002, the National Investment Bank of Jamaica (NIBJ) told the country that work on the railway would begin soon.

Negotiations for Highway 2000 were also underway and work on the toll road began with a groundbreaking ceremony in December 2000.

By October 2003, phase I of the new highway, starting at Bushy Park, had its official opening with the Vineyards toll booth.

Delays in signing off on the railway negotiations, however, led the Indian investors, in 2003, to charge that the Government was “dragging its feet” on the proposed joint venture.

But Transport Minister Robert Pickersgill shot back that the Indian consortium was demanding far more than Jamaica was prepared to give.

Work on the toll road from Bushy Park to Sandy Bay in Clarendon was proceeding according to plan, leading to claims that the contract for the highway construction dictated that passenger rail service was not reintroduced.

Pickersgill pooh-poohed the assertion that the agreement for the operation of Highway 2000 precluded the development of a competing rail network. “I do not see how Highway 2000 would prevent the Indian investors,” he was quoted as saying.

But Pickersgill’s explanation also inferred that there were contractual distinctions made with the highway builders between transporting rail cargo and passengers.

“The railway, to the best of my knowledge, is not predicated on commuters but on cargo,” Pickersgill added.

“In fact, the (highway’s) concession arrangement speaks to rail and what would happen if certain things were to happen. I do not think that from Spanish Town to Kingston (the proposed first segment of the rail service) there is any competition, because if you want to get (cargo) to Kingston quickly and economically, it is through the rail,” Pickersgill said in the newspaper report.

However, RITES had indicated that it wanted to also operate a passenger service in addition to moving cargo.

Last September was the turn of the Chinese to complain. They, too, voiced concerns about the Jamaican Government’s delay in signing off on the MOU, which both parties entered into one year before in 2005.

Commenting on a possible objection by the operators of Highway 2000 to transporting passengers by rail, the Chinese ambassador said there was enough traffic in Jamaica for both to be viable.

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