Jamaica provides update on privatization, PPP plans

The Development Bank of Jamaica (DBJ) has updated its plans for several privatizations and the tender of five projects through public-private partnerships. 

The projects are detailed in an investment opportunities booklet that the bank shared this week with BNamericas. 

DBJ is the entity in charge of implementing the country’s privatization and public partnership program (P4), which has so far seen nine transactions worth a combined US$1.7bn. 

These include PPP projects such as the Norman Manley international airport, the Sangster international airport (SIA), Kingston container terminal and the north-south and 2000 highways, in addition to the privatizations of the Wigton windfarm, the Caymanas Track company and the Petroleum Company of Jamaica. 

Here BNamericas takes a look at the projects that are in the P4 pipeline. 

PRIVATIZATIONS

DBJ is considering privatization of some or all the services provided by three companies controlled by the government.

These include electricity supplier Jamaica Public Service Company (JPS), the Jamaica Mortgage Bank (JMB) and the Jamaica Railway Corporation (JRC). 

For JRC, business model plans still being evaluated involve privatizing the commercial railway services offered at the sections that run through Montego Bay city and the St. James and St. Elizabeth parishes. JRC’s railway network spans 335km through 14 parishes. 

Another business model to be determined concerns the privatization of JPS, for which the government has begun plans to divest all or some of its shareholding through the Jamaica Stock Exchange (JSE).

The plan to privatize JMB via JSE could help the government reach several goals, including raising capital for bank to facilitate housing development and deepening the mortgage market, widening the ownership of JMB, and generate funds for the state coffers.

PPP PROJECTS

The PPP business opportunities being considered include projects in the water, waste and logistics sectors, These were initially presented by officials during an online conference in November. 

The logistic opportunities involve a concession for the US$221mn Caymanas Special Economic Zone (CSEZ) and the US$14mn Kingston logistics park.

CSEZ involves building, operating and promoting a warehousing, manufacturing and logistic service zone in a 236ha greenfield site near the port of Kingston. Feasibility studies have already been completed and the plan is to award it through a 22-year concession. 

The logistic park will require an investor and/or operator to build an 18,000m2 warehouse at the Kingston port and operate it for 50 years. 

The P4 pipeline also includes a solid waste management project worth an estimated US$200-400mn to improve waste management on the island during the next 25 years, and a water reduction program worth an estimated US$35mn for the country’s northern parishes. The latter seeks to reduce non-renewable water from 74% to 30% by December 2021. The government is planning to award the PPP project through a 20-year concession. 

There are also plans to expand the Soapberry wastewater treatment plant in Portmore and Kingston via a 30-year concession or privatization, with an estimated capex of US$85mn. The aim is to double the plant’s capacity of 62,000m3/d.