THE GOVERNMENT of Jamaica is aiming to build stronger ties with Venezuela in air transportation, according to a statement from the Ministry of Commerce, Science and Technology issued yesterday.
This will involve increased co-operation between the respective national airlines and could also mean some relief for Air Jamaica, if their current fuel demand can be met from an increase in the quota of crude which Jamaica receives from Venezuela under the PetroCaribe Agreement, the ministry stated.
This was one of the matters discussed in a recent meeting between representatives of the Government of Jamaica and Venezuela, chaired by the Hon. Phillip Paulwell, Minister of Industry, Commerce, Science & Technology, with Energy.
Minister Paulwell said the meeting was convened to further establish the terms under which Jamaica could benefit from funds made available by the Venezuelan Government under the PetroCaribe Agreement and other existing facilities, for implementing various projects.
Important matters on the agenda included the Highway 2000 loan facility, the rehabilitation of damaged physical infrastructure, and the establishment of critical regional institutions in the areas of health, education, and renewable energy, through the use of funds made available under the PetroCaribe Agreement and the Petrojam refinery upgrade.
Discussions are 'considerably well advanced' on the prospect for improved co-operation between the airlines of both Venezuela and Jamaica, the statement said. The meeting represented a further step towards completing the proposed amendments to the existing air services agreement and Jamaica has proposed to increase the number of flights to Venezuela from four weekly flights to one flight per day.
With regards to the Highway 2000 loan, the Venezuelan and Jamaican delegations developed a draft loan agreement, for review by their respective legal advisors.
Rehabilitation of Damaged Physical Infrastructure
Following the severe damage done to Jamaica's infrastructure during the past two hurricane seasons (2004 & 2005), the Jamaican Government, in November 2005, prepared a programme called the National Road Rehabilitation and Maintenance Programme which has three main components:
1. Main roads rehabilitation and periodic maintenance
2. Flood control works
3. Community and farm roads programme
The scope of the programme, which seeks to give attention to over 4,832 Km of off-road drainage gullies islandwide, requires the sum of US$100M to fund its implementation. The alleviation of poverty, and improving the access to health care, education, and other benefits of a developed society are important national objectives for both governments, and is at the heart of the PetroCaribe Agreement, and so funding the rehabilitation of Jamaica's damaged infrastructure under this umbrella - or some other special funding mechanism, was an important issue for discussion and agreement.
The Government of Venezuela will very shortly send an inspection team to examine the projects, and conduct site visits so that further agreement can be reached.
Refinery Upgrade
Turning to the Petrojam refinery, it was proposed that shares in the joint venture project be allocated with Jamaica as the majority stakeholder. This represented a significant step forward for the parties, as well as the agreed preparatory work having been completed, it now remains for both countries to cement the arrangements in a joint venture agreement. The Government of Venezuela will be sending a legal team to Jamaica to negotiate and finalise the terms of that agreement.
Marketing & Distribution
The Government of Jamaica is also seeking to increase Petcom's influence in the retail market, by increasing its market share to 20%. A partnership with the Government of Venezuela could provide the additional capital required for this investment.
According to Minister Paulwell, Jamaica wishes to emphasise the strategic and economic importance of Petcom as a retail outlet for the production from the upgraded refinery. He said that the successful distribution of the benefits of the joint venture investment to the people of Jamaica will be achieved through increasing Petcom's market penetration and as such, the opportunities for acquiring new business require urgent action.
Petcom Limited is a wholly-owned subsidiary of the Petroleum Corporation of Jamaica (PCJ) and carries on business as an oil marketing company through a network of thirty-one (31) filling stations in Jamaica.
The Government of Venezuela confirmed their continued interest in this opportunity and in the coming weeks the parties will complete a valuation of the existing assets and determine the best way to proceed.
