TransJamaican to take over highway operator
In a few weeks, a clearer picture should emerge as TransJamaican Highway Limited (TJH) moves to acquire the company responsible for the daily operations of Highway 2000 East-West.
That is the commitment from TJH Managing Director Ivan Anderson as he reported to shareholders at the highway company’s annual general meeting.
In a notice to the Jamaica Stock Exchange, TransJamaican Highway said negotiations are ongoing for the full takeover of Jamaican Infrastructure Operator Limited (JIO), which is owned by two French companies.
Under present arrangements, JIO receives a three per cent cut of revenues along with a monthly fee from the highway company. Anderson told shareholders that at least half of total operating costs on TJH’s books are attributable to the JIO arrangement.
“Fifty per cent, or more, of our operating expenses are related to the fees that we pay JIO for their operations. In fact, 35 cents out of every dollar that we earn goes to pay JIO for their operations,” Anderson said.
TransJamaican Highway is the company responsible for the development, operation, and maintenance of Highway 2000 East-West under a 35-year concession agreement granted by the National Road Operating and Constructing Company Limited (NROCC).
Its operations currently incorporate the 43.4 kilometre-long Kingston to May Pen leg, which is known as the T1, a tolled off-ramp to Spanish Town, and a 6.5 km stretch known as T2 that stretches from Kingston to Portmore.
Anderson also disclosed that for the May Pen-Williamsfield alignment now under construction, a new 28 kilometre stretch of Highway 2000 East-West to be called the 1C, TransJamaican Highway had exercised its right of first refusal to operate that toll road, which is due for completion in March 2023.
Jamaican Infrastructure Operator is a joint-venture company owned by VINCI Concessions, 51 per cent, in partnership with Bouygues Travaux Publics, 49 per cent. Bouygues was the original primary company in the development of Highway 2000 under concession that was held through TransJamaican Highway. The Jamaican Government acquired TransJamaican and took over the concession and listed the highway company on the Jamaica Stock Exchange in March 2020.
NROCC holds the largest block of shares in TJH and controls the company.
JIO manages and operates the highway network on behalf of TJH under contract and also collects tolls at all four toll plazas.
It was reported in 2020 that the Jamaican Government had issued a five-year operations and maintenance contract for Highway 2000 East-West to JIO. The agreement, which is set to expire on December 20, 2024, can be renewed with JIO or contracted to another highly experienced and reputable international toll road operator.
Contacted for further comment Anderson, who is also managing director of NROCC, says he expects the talks to be wrapped up in short order. TransJamaican is looking to purchase 100 per cent of the shareholdings in JIO.
“The negotiations are going well. I can’t say more at this time, but we expect to conclude the talks by the end of third quarter,” Anderson told the Financial Gleaner.
Anderson, who was appointed managing director of TransJamaican in April 2021, replacing Thierry Parizot, outlined plans to shareholders to build a number of off-ramps for the highway corridor. He expects that the Salt Pond and Hartlands off-ramps will bring about 3,000 additional users.
The new ramps are to be non-cash toll points for prepurchased T-tag holders but will also have the capability to accept credit cards and digital currency payments, Anderson says.
As to commercial activity along the toll route, he said a Total gas station is up and running on the Old Harbour segment, and TJH will be partnering with another petroleum marketing company to establish yet gas station on the Portmore leg.
Last year, amid a pick-up of commuter traffic, TransJamaican’s turnover improved by 16 per cent to just under $58 million and spun from a loss of US$1.87 million to a profit of nearly US$4 million.