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JRC insists revived train service can be profitable
A vintage steam locomotive, built in 1944, stands on a track atJamaica Railway Corporation headquarters in downtown Kingston.
News
Vernon Davidson | Executive Editor, Publications | davidsonv@jamaicaobserver.com  
September 30, 2017

JRC insists revived train service can be profitable

It’s a recurring dream across political administrations, only this time the Jamaica Railway Corporation (JRC) says it intends to be more strategic in its quest to revive the train service.

The strategy, JRC Chairman Ferris Ziadie explained, is to segment the service into three areas — passenger, cargo, and excursion.

“The train service, segmented, in different phases for different objectives can have profitability,” Ziadie insisted in a recent interview with the Jamaica Observer.

“However, if you’re going to take the whole service and start it up and say you’re doing everything with it, it’s not going to work,” he argued.

The strategy is apparently shared by Herzog International, the American company that last December signed a memorandum of understanding with the Ministry of Transport and Mining to revive the rail service.

Herzog, which proposed to invest US$250 million in the project, was scheduled to deliver its business plan to the Government by the end of September.

However, in the event that the Government accepts or does not accept the Herzog plan the JRC has done its own assessment which basically requires that the service be resuscitated in three phases.

Phase one is from Montego Bay to Appleton estate in St Elizabeth for heritage and tourism excursions; phase two involves the haulage of bauxite and cargo from Appleton to Spanish Town and Linstead; while phase three will see the movement of passengers and cargo from Old Harbour to Spanish Town to Kingston.

“We had to develop the plan because if the Government accepts Herzog we would have to use something as a measuring stick to compare what it is they are putting on the table,” Ziadie told the Sunday Observer.

The railway system, which was first introduced to Jamaica in the mid-1800s, is one of the oldest in the Western Hemisphere. It played a vital role in providing passenger and freight services to the agricultural and mining sectors.

However, in October 1992 the Government, faced with the railway’s inability to cover its costs, decided to suspend the service and started efforts to privatise it.

In 2011 it was revived briefly, but stopped within a year.

The current effort to revive the service has a lot riding on the successful resumption of the Montego Bay to Appleton service. That is why the JRC has started to return some semblance of order to the People’s Arcade in Montego Bay, the 2.75-acre property that once served as the railway terminus but which is now overrun by squatters.

The property was illegally occupied by the St James Parish Council in 1995, but was recently handed back to the JRC when the squatter problem mushroomed and the place was declared a health hazard by the Public Health Department.

The JRC says it has gone in and started cleaning drains, and has got the Jamaica Public Service to take down illegal connections to the electricity grid, replacing them with legitimate service.

“We are working with the public agencies to do as much as possible, and our estimate is that we are going to be spending perhaps no less than $5 million by the time we are done,” JRC General Manager Fitzroy Wallace told the Observer a few weeks ago.

Ziadie also said that the JRC has started a registration process to determine what sort of activities — commercial or residential — are taking place in each section of the arcade which has just under 600 shops, some of which double as homes.

“That will help us to attempt to improve the conditions, because if we can’t register the persons and get them to be part of a uniformed programme it’s going to be very difficult for us to institute any form of rehabilitation and be successful at it,” Ziadie said.

Explaining the rationale for the rail service to be operated in segments, Ziadie said “There is a huge benefit for heritage and tourism in the western end of the island. There is also a huge benefit now, with the turn of the bauxite industry, for another section… and the new bauxite players are in negotiation with us now to improve… In another section, on which we are currently doing a feasibility study, but it looks very promising, there are hundreds of thousands of people commuting from Old Harbour to Kingston every day. If we can move these people in relative comfort and in predictability of time, we can achieve profitability.”

That system falls under Transport Minister Mike Henry’s vision of a multi-modal transport service which he has been pushing for many years.

The Old Harbour to Kingston network, for instance, would see commuters either taking taxis to, or driving their cars to the train station in Old Harbour and parking them there; the train takes them into Kingston where taxis take them to their destinations and they eventually take the train back to Old Harbour from where they make their way back home.

“But it has to be co-ordinated with the different agencies and services. We don’t want to dislocate any persons that are currently earning a living from these services,” Ziadie explained.

“If we were to be aggressive with it, our indications are that we could make it profitable,” he insisted.

Ziadie avoided predicting in dollars what the JRC would consider profitable, offering only an economist’s explanation that “A profitable venture is when the investment can be recouped and the shareholders are paid because the income of the business model can sustain the size of the investment and operational expenses.”

Added Ziadie: “Every developed, economically competitive society has accepted the fact that the easier it is to move people, goods and services from one point to another is the less it costs the country to do its business, and Minister Henry’s multi-modal plan is to tie all of this together and ensure the economies of scale are taken into consideration. He doesn’t want to leave out the bus service and the taxis, he wants to make sure that everything is so tied together that everything benefits from it.”

A map showing the current rail network across the island.
ZIADIE… the train service, segmented, in different phases for different objectives, can haveprofitability (Photos: Bryan Cummings)

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