Taxpayers fate pinned to Bouygues' decision

TAXPAYERS COULD be asked to foot the more than $1 billion loan that will be used to build phase one of Highway 2000, should successful French bidder Bouygues decides to withdraw from the project.

That was one of the many concerns raised about the financing and viability of the project on Saturday at a public information forum organised by the Farquharson Institute of Public Affairs to critically review and examine the implications of the super-highway.

Speaking on the concept of the highway, Kingsley Thomas, chairman of the Highway 2000 committee, said the highway is to be built under a 35-year Build, Own, Operate and Transfor (BOOT) public/private sector partnership concession agreement.

Under the agreement, the concessionaire is to source a US$227 million loan for the construction of the first phase of the multi-lane highway that will connect Kingston to Mandeville, covering 72 kilometres. The entire project, he said, runs from Kingston to Montego Bay, covering 230 kilometres at a cost of US$852 million.

Second phase

The second phase will begin a year after the completion of phase one. Phase two is to cover 86 milometres from Mandeville to Montego Bay and 66 kilometres from Bushy Park in St. Catherine to Ocho Rios, St. Ann. The cost is expected to be US$560 million, but that does not involve land acquisition and professional fees for which US$65 million has been earmarked.

Answering questions from the audience, Mr. Thomas said the Government would be obliged to service the loan if Bouygues pulls out mid-way from the contract.

"In most concession agreements I have seen, there is a provision that in the event of a termination of the concession agreement, the government of the country, which has the asset (in this case the highway), takes over the servicing of that loan," he said.

However, Mr. Thomas told The Gleaner later that if the original concessionaire pulls out, the Government could always sell the concession agreement to another company.

"We have an asset which will engender economic growth and to the extent that the cost of that asset was funded by loan, it only stands to reason that the Government would service those debts," he told the forum earlier.

Dubbed "Highway 2000. What Does It Mean For Jamaica?", the seminar had a number of local and international resource persons who made enlightening presentations on the highway's concept and developmental issues. They also spoke to the influence of highways on national development, economic growth and job creation, environmental and social issues.

Meanwhile, addressing other concerns about the proposed Highway, Mr. Thomas dismissed suggestions that the original road network would not be maintained because the Government would shift its focus to the new highway. He said Bouygues would be responsible for maintaining the highway and collecting tolls for 35 years.

Responding to questions as to whether large-scale residential developments would be built beside the highway, thereby creating traffic hazards, Mr. Thomas said it was not likely to be so, and in any case, the entire highway would be fenced apart from the various entry points to the highway.

Also speaking at the seminar was Cedric Richards, president of the Incorporated Masterbuilders' Association of Jamaica (IMAJ), who said he expected Bouygues to get the best sub-contractors to provide quality work since Highway 2000 was one of the most extensive projects ever embarked on a by a Jamaican government.

"We are not only expecting your best, but let it be a showpiece of your career," he said. "Tourists must want to come here just to drive on it like they visit Germany to drive on the Autobahn," said Mr. Richards.

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