Golding: The Government should make a definitive statement so that individuals and businesses that were encouraged to invest can make informed decisions. - FILE
LEADER OF the Opposition, Bruce Golding, has said that Jamaica's growth prospects could suffer a further severe blow, if the planned expansion by Alcoa of the Jamalco plant in Clarendon is shelved. This would also have a devastating effect on the plans to import LNG from Trinidad.
In a statement yesterday, Mr. Golding said that for some time there have been whisperings within industry circles that the fate of the Jamalco project was in doubt. Recent information, he said, indicates that the project has been 'archived' and a large number of the engineers and specialists engaged in Canada in the design of the project have been laid off or reassigned to other projects. While the expansion of rail links into new mining areas will continue, it appears that the major expansion of plant capacity will not now be pursued.
Mr. Golding noted that the project was predicated on the use of LNG to be supplied from Trinidad. With oil prices at current levels, this has become even more critical to its feasibility. LNG supplies were originally expected to come on stream this year. This, he said, has not materialised and the current hope is that it will be available in 2009. But this, he pointed out, is still not certain as there is yet not agreement with Trinidad on the price at which LNG will be sold, a factor which is crucial to the viability of the project. The situation is further complicated by the fact that the feasibility of the LNG project was itself contingent on the utilisation by Jamalco of more than 50 per cent of total LNG supplies. In other words, without LNG the Jamalco expansion becomes highly unlikely, and without the Jamalco expansion the LNG project is virtually dead.
MAKE INFORMED DECISIONS
The decision to 'archive' the Jamalco expansion may also have been affected by a review of Alcoa's investment programme, including its decision to establish a large plant in Guinea where it has identified large reserves of high-grade and easily accessible bauxite.
Mr. Golding said it was necessary for the Government to make a definitive statement on the matter so that the many individuals and businesses that were encouraged to position themselves to capitalise on the opportunities that this investment would have created can make informed decisions.
Mr. Golding noted that this project would have been the largest single investment ever to have taken place in Jamaica involving close to US$1 billion. Jamaica, he said, stood to lose significantly to foreign exchange earnings as the high demand for alumina driven especially by China and India is expected to keep alumina prices high for a considerable length of time.
