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Development Bank of Jamaica reports $26 billion divestment haul

Published:Thursday | February 12, 2015 | 11:01 PM
File DBJ managing director, Milverton Reynolds

related privatisation costs, among other expenses, Reynolds said.

He adds that of the 16 entities privatised to date, eight were either under-performing, under-capitalised or were a drain on fiscal resources. These were primarily the six sugar estates, as well as Wallenford and Windalco.

"The sale of these entities essentially removed the cost of operations from the Government's books and transferred those obligations to the private sector, which brings adequate capital, economies of scale, expertise and markets to improve the efficiency of the operations," said the DBJ head.

The overall savings to the Government from the privatisations is about $4.34 billion per year, broken down by Reynolds as: $3.7 billion of operating losses for the sugar companies; $297 million for Wallenford; and $345 million (US$3m) for Windalco.

Alongside the port assets, DBJ's divestment list also includes: assets of the Cocoa Industry Board, which are up for sale; Caymanas Track Limited; Petroleum Company of Jamaica Limited; Jamaica Railway Corporation via PPP, and the Montpelier lands in St James, a portion of which are up for sale, while some will be leased. The method of for Caymanas Track and Petcom are still to be approved by Cabinet.

Reynolds said deals for the Cocoa Board assets and KCT "are at an advanced stage of negotiations" and should be finalised by March. The Montpelier lands transaction also has the same wrap up date.

In relation to horse racing company Caymanas Track Limited, Reynolds said the business has incurred operating losses of about $84 million per annum over the last three years to year ending March 2014, and that the DBJ is seeking "an experienced operator" with the right "synergies and capital" to take over the operation.

Other assets recommended for divestment, but are yet to be packaged for the market, include Nutrition Products Limited, Bath Fountain Hotel and Spa, Milk River Spa, Jamaica Exotic Flavours and Essences Limited and St Joseph's Hospital.