Dr Horace Chang, minister with responsibility for water, works and housing in the Ministry of Economic Growth and Job Creation, says the Urban Development Corporation (UDC) is about to be split into two distinct units, with one focusing solely on revenue generation.

Speaking during his sectoral presentation in Parliament on April 4, Chang said the UDC has commenced a review of its institutional framework.

This will see the entity splitting its operations into a commercial arm that will focus on revenue-generating activities and an operational arm that will concentrate on urban development projects across Jamaica, he outlined.

As indicated on its website, the UDC has a combined asset base valued at approximately $41 billion, mainly in land and buildings. The institution has been clawing its way back from annual losses of over $1 billion in recent years.

The UDC, although a government-owned company, was taken off the central government’s budget in 1987 and is required to be self-financing.

Projects are financed by retained earnings, grants from the Government, loans from commercial banks and international lending institutions for primary infrastructure and secondary development. Income is derived from the return on investments in land and buildings, property sales, and project management fees.

Though asset-rich, the agency has struggled with the issue of free cash. Hanging around its neck at one point were liabilities including a $1 billion loan to Ackendown Newtown Development Company; a $1-billion PetroCaribe loan which was utilised for the Falmouth redevelopment; and a funding requirement of the Montego Bay Convention Centre of approximately $23 million per month.

In addition to divestment, strategies to raise revenue have included increasing fees at beach attractions and the Dunn’s River Falls.

In the last five years, profitability was reportedly achieved via the sale of underperforming assets.

However, the UDC has not tabled an annual report for some time and recently came under fire for the manner in which some of the assets were disposed of.

Noting that the UDC was created primarily to ensure orderly urban development across the island, Dr Chang announced that the entity has been rebranded.

“The UDC is currently focused on the urban renewal of downtown Kingston, and is collaborating with the National Housing Trust (NHT) and the NWC (National Water Commission) in undertaking this massive undertaking…Emphasis is also being placed on the development of Montego Bay, with special focus on the Beach Park, waterfront beaches and the Montego Bay Hip Strip,” he outlined.

Chang said work is also being done with various stakeholders to alleviate the traffic and transportation problems currently facing Montego Bay, as well as to develop an artisan village in the pedestrian loop around the city.

“This will enhance the tourism product through exposure to visual and performing arts, gastronomy, and other authentic cultural experiences,” the minister stated.