Edmond Campbell, Senior Staff Reporter
A STRING of loss-making entities have left the powerful state-owned Urban Development Corporation (UDC) haemorrhaging as the company struggles with a net operating loss of close to $490 million this year.
Parliament's Public Administration and Appropriations Committee heard yesterday that the massive net operating loss was recorded for the period ended August 31, 2012.
The company had budgeted for a net operating loss of $219 million.
A major loss-making entity for the UDC is the Montego Bay Convention Centre in St James.
UDC General Manager Desmond Malcolm said the centre was a huge drain on the operations, costing the UDC $300 million per annum.
"It is a beautiful centre. However, it is going to take a long time for us to realise profits. We are not going to give up," Malcolm told committee members.
He said stakeholders in the hotel industry were working with the UDC to market the facility.
The underutilised downtown Kingston bus park is also stressing the UDC. According to Malcolm, the bus park was costing the corporation $10 million per year with little revenue trickling in.
He said attempts had been made to transfer the bus park to the Kingston and St Andrew Corporation. However, he said the UDC had to take back control of the park.
"We had to take possession to secure our investment. It's very unfortunate, but $10 million is what we have to be putting out now. We don't feel it's fair," Malcolm said.
Yesterday, the executive of the UDC appeared before the committee and was quizzed about a number of non-performing assets owned by the company.
Committee member Mikael Phillips wanted to know what the UDC was doing about the Machado complex, purchased by the corporation in 2010 for $80 million. At the time of the purchase, it was proposed that the UDC would relocate its headquarters to the 3.5-acre complex located at 22-26 Victoria Avenue and South Camp Road.
Questions were also raised about the JAMINTEL building on Duke Street in Kingston and the Cotton Polyester Mill in Old Harbour which is owned by the UDC.
Raymond Pryce asked whether the UDC had purchased junk assets. Malcolm said he could not provide an answer at this time, but would carry out research to determine the rationale behind purchasing some of the assets.