TransJamaican loses right to road rival compensation
The Jamaican Govern-ment has amended the highway concession agreement to waive any claim or right to compensation by TransJamaican Highway with respect to the widening of the Nelson Mandela Highway and the completion and commissioning of the North-South Highway.
Under the previous arrangement, the compensation clause in the Highway 2000 agreement would have been triggered were the Government to upgrade any competing road that affected business on the tollway.
The clause, which was amended on January 29, 2020, had required that Jamaica compensate developer and concessionaire TransJamaican Highway if traffic is reduced due to improvements on an alternate route, according to information released by state-owned National Road Operating and Constructing Company, NROCC, in the prospectus for the TransJamaican Highway initial public offering of shares, IPO.
TransJamaican, the toll concessionaire for the East-West corridor of Highway 2000, was taken over from its French owners last December by NROCC, which is in the process of floating the company on the stock market under the Government’s privatisation programme.
The IPO opened for subscription on Monday at $1.41 per share. It aims to raise $11 billion to $14 billion.
The current concession agreement is a 35-year contract that has 17 years left to run. The January amendment grants an option to renew the concession for a further 35 years. It also acknowledges that routine and periodic maintenance of roads within the relevant transport corridors, even if the result is to increase the speed limits on such roads, will not trigger compensation.
Mandela Highway is a public thoroughfare within the Government’s network.
The North-South Highway, commissioned in March 2016, is being operated under a 50-year concession by Chinese-affiliated company Jamaica North South Highway Company Limited.
Still, NROCC must compensate TransJamaican Highway for loss of revenue if the Jamaican Government or any party contracted or assigned by the Government, develops a new rail public-passenger link between Spanish Town and Kingston or enhances the speed or capacity of competing roads within the corridor served by the toll road.
The speed limit on the East-West toll highway is 110 kilometres per hour, while for regular roads and the North-South Highway, traffic speeds are capped at 80kph.
The amount of compensation payable to TransJamaican Highway will be determined by an independent traffic adviser. Disputes may be referred to and settled under the rules of conciliation and arbitration of the International Chamber of Commerce by three arbitrators in London.