No profit expected on North South highway until the next 20 years - NROCC

Ivan Anderson, Managing Director of the National Road Operating and Constructing Company (NROCC), has revealed that developers of the North South leg of Highway 2000 are unlikely to begin making a profit before the next 20 years.  
   
Mr. Anderson made the pronouncement at Wednesdays meeting of  Parliament's Public Administration and Appropriations Committee (PAAC).  
   
He said it is estimated that the developers spend as much as US$30 million a year for debt servicing. This is almost double the US$18 million earned in revenue annually.

"So the debt service alone is significantly more than the revenues being generated by the North South, (and) not just the debt service, but you also have operating costs," he suggested, adding that all these debts result in a "no win situation for a very long time."
 
The 66 kilometer highway which runs from Caymanas in St. Catherine to Mammee Bay, St. Ann was constructed by China Harbour Engineering Company (CHEC) at a cost of US$730 million.  
   
It is being operated by the Jamaica North South Highway Company under a 50-year concessionary agreement with the Government.

In the meantime, Mr. Anderson said NROCC has racked up more than US$439 million in debt since the start of the construction of Highway 2000 project, which is separate from the debt of the developers. Specifically, he siad the East West and Mount Rosser legs of the highway were funded by the government.

The US$120 million which was spent to construct the Mount Rosser leg of the highway was a loan to developers and the amount is to be repaid over the life of the concessionary agreement, he declared. 

Final leg starting this year

Meanwhile, Mr. Anderson said construction of the final leg of Highway 2000 is to get underway at the end of this financial year. 
   
The 28 kilometer section of the highway will be constructed at a cost of US$188 million and will extend from May Pen, Clarendon to Williamsfield in Manchester.

"Right now, the designs are being prepared by the contractors. We expect the environmental impact assessments have been done. We're having public consultations starting next month for the highway. Once we start, it will take us approximately two years for that highway to be completed," he stated. 

The project is being financed by the China EXIM Bank.