Railroad scrap sale won't affect divestment - DBJ
The Jamaica Railway Corporation (JRC) is scrapping a derelict railroad bridge at the Rio Grande River in Portland, but the Development Bank of Jamaica (DBJ) said on Tuesday that the operation does not affect ongoing plans to divest the rail service.
The rail company is seeking a candidate to 'dismantle and dispose' of the bridge parts.
The bids are due November 14.
The bank did not address the issue of whether the scrap operation was one-off, but said the advertisement "is related to scrap metal parts of the old railroad bridge which was replaced by a new bridge after it became structurally unsafe".
"The old railroad bridge is therefore not a part of the current railroad infrastructure and is not included in the assets being considered for privatisation."
Rail works in Portland are not the main focus of the divestment committee at this time, said DBJ.
"The Government of Jamaica's primary consideration at this time is the Kingston to Montego Bay segment of the railway; however, there are no exclusions of parishes or any other particular line segment of the railroad in the privatisation discussions," the bank said.
The Public Bodies Report also indicates that the sale of scrap metal, rent collection, disposal of some land parcels and other property and equipment, were part of the pre-divestment strategy.
DBJ is reviewing expressions of interest from three prospective investors in JRC. Government is seeking a buyer who can develop a self-financing rail service that has basically been dormant since 1992, except for experimental runs. Jamaica has been trying to find a buyer since 2009.
While a good portion of its assets are either idle or derelict, JRC the company remains operational and is manned by a staff of about 63. Its earnings come from its track-user agreement with bauxite company Windalco; its real estate holdings, which yield rental income; and scrap sales.
JRC revenue was estimated at $115 million in the last fiscal year, from which it was expected to turn a profit of just under $9 million. This year, ending March 2015, revenue is projected at $128 million and profit at $4.5 million.