Gov't to pay $2 billion in damages to NTCS

Barbara Gayle, Staff Reporter



The Government is to pay more than $2 billion in damages to the Ezroy Millwood-led National Transport Co-operative Society (NTCS), arising from the termination of its franchise agreements to operate in the Kingston Metropolitan Transport Region.



The Court of Appeal made the ruling today.



The NTCS have been in dispute since September 7, 1998 when it terminated the franchise agreements, which came into effect on March 1, 1995 for a period of 10 years and granted an exclusive licence to the state-owned Jamaica Urban Transit Company (JUTC).



The NTCS refused to accept the termination and continued to operate until March 7, 2001 when the parties reached a compromise.



An arbitration award was made in favour of NTCS for a six-year period from 1995 to 2001, amounting to $4.5 billion with interest to be calculated at the Treasury bill rate and the commercial bank lending rate.



The Government took the matter to the Supreme Court and was successful in having the award set aside on the grounds that the agreements were illegal because the minister of transport and works, who granted the licences, had acted contrary to the Public Passenger Transport (PPT) Act.



The NTCS appealed the Supreme Court’s ruling and it was upheld by the Court of Appeal.



The NTCS went to the United Kingdom Privy Council, which ruled in November 2009 that the franchise agreements were not in compliance with the PPT Act.



However, the Privy Council said despite that, the NTCS was entitled to damages for a period of three years from the date of the issue of the licence.



The matter was sent back to the Court of Appeal for damages to be assessed for three years.



Lord Anthony Gifford and attorney at law, Patrick Bailey, had said the award to NTCS should be substantial because it made a huge investment in a project which was intended to last for at least 10 years.



Millwood, in responding to the award today, said he was disappointed with the long time it took to get justice from the courts.



His lawyer, Patrick Bailey, said Prime Minister Bruce Golding had referred to the debt as one of the legacy he had inherited.



Bailey said he hopes payments will be made expeditiously now that Golding is demitting office.



The Government is to pay $1.85 billion with interest calculated at six per cent per annum on that amount from November 29, 2004 to September 30, 2011.



However, only 50 per cent of the interest will be paid.



Legal costs, in favour of NTCS, will be determined at a later date as the Government’s lawyers want to make further submissions.



barbara.gayle@gleanerjm.com