Mon | Oct 15, 2018

Growth & Jobs | Chang underscores the value of private partners

Published:Tuesday | October 3, 2017 | 12:00 AM
Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Dr Horace Chang (right), greets Chief Executive Officer of Mexico-based company, Pacific Airport Group, Fernando Bosque (left), at a Bidders Conference for the divestment of the Norman Manley International Airport, on the grounds of the facility in Kingston last Tuesday. Also pictured is General Manager, Private Public Partnership, Privatisation Division of the Development Bank of Jamaica, Denise Arana.

Minister without portfolio in the Ministry of Economic Growth and Job Creation, Dr Horace Chang, says the Government is committed to supporting private partners in the development of infrastructural projects in Jamaica.

"The administration fully appreciates and realises the value of partnership with private-sector interests. We have sought to provide the instruments of engagement that allow for the building and retooling of various enterprises and infrastructural activities throughout the country," he said.

The minister was addressing a bidders conference for the divestment of the Norman Manley International Airport (NMIA) on the grounds of the facility in Kingston last Tuesday.

Chang said that the divestment of the Kingston Container Terminal (now the Kingston Freeport Terminal) and Sangster International Airport (MBJ) signals the kind of transformation that takes place with private-sector involvement.

"We have a history of significant government involvement in business, but this Government is committed to creating the infrastructure for the private sector and to facilitating their investment and development," he said.

He pointed out that this private-public partnership (PPP) arrangement with the NMIA would further equip the country to meet the demands of the global economy and to position the nation "as a truly multimodal transportation region".

"We are very pleased at the show of interest in the NMIA private-public partnership," he said.

Chang noted, as well, that the divestment plan was part of the strategic plan to move the country on an accelerated growth path.

Selected bidder for airport investment to be announced by March 2018

Transaction Lead at the International Finance Corporation Michelle Ottey said that the private-public partnership arrangement for the Norman Manley Internaational Airport (NMIA) represents a "very attractive opportunity from an investment perspective".

"The time is also right for this transaction, because we have a framework, and we have a highly supportive Government with a robust PPP framework," she said.

She noted that the Government has had a "strong record" of PPP delivery, including the MBJ, which was granted concession in 2003.

"The success of that (divestment) is testament to the fact that the Government really is committed to partnership in this area, and Norman Manley is expected to benefit from similar support from the Government," she said.

Ottey gave the assurance that the NMIA PPP arrangement would be a concessionary agreement and would not involve the sale of the airport.

"This is a strategic asset of the Government, and so it is not an outright divestment or sale of this asset. It is a long-term concession of the asset where the airport site and all immovable properties remain under the ownership of the Airports Authority. What is being granted is the exclusive rights to use these assets for the period of the concession," she said.

Under the arrangement, the successful bidder will agree to a 25-year concession with the option to extend for five years by mutual consent. The company is also expected to pay an upfront fee of US$5 million.

Concessionaire responsibilities focus on the commercial, financing, and completing required works; operating the airport and improving efficiency; and maintaining and refurbishing the airport facilities.

The Government has been unsuccessful in divesting the NMIA for a number of years. However, following an international invitation for bids earlier this year, and an evaluation process, eight firms were selected.

A preferred bidder is expected to be selected and announced by March 2018.