Patterson (left) and Phillips (right)By Alva Edwards,
Acting Financial Editor
THE BELEAGUERED North Coast Highway project with its ambitions to link the country's tourism hotspots has in effect been abandoned by the Government. It has now decided to use the funds granted by the European Development Fund (EDF) for construction elsewhere.
Briefing the media at Jamaica House on Monday as to deliberations undertaken in last weekend's pre-budget government retreat in Ocho Rios, the Prime Minister P. J. Patterson ventured an explanation for this volte-face.
The highway project, he said has taken too long to get off the ground and is to be reformulated to focus on existing roadways.
Of the 80 million euros granted by the EDF for the construction of the North Coast Highway, only 40 million will be used, with 20 million of that sum to be used to launch a national road maintenance fund.
The parishes of Portland, St Thomas and St. Mary are expected to be the beneficiaries of this $20 million euros (approximately J$810 million) with that figure earmarked for upgrading and refurbishing the road network in those areas.
Although the EDF may decide to acquiesce in light of the Government's decision, this latest move may well set an unpalatable precedent whereby the Government gets in the habit of utilising funds granted by foreign agencies for a specific, identifiable purpose for its own ends.
The Prime Minister sought to validate this decision to use the funds elsewhere by saying that the Finance Minister, Dr. Omar Davies will be preparing a modified financing submission for presentation to the European Commission (EC) and that the Government could see no reason why the EC would object to the Government's intention to "re-direct" the funds.
The North Coast Highway Improvement Project (NCHIP) was originally conceived as a two lane international standard highway, extending from Negril in the west of the country to Fair Prospect, Portland in the east.
The intention was to strengthen the approximately 300 kilometres of road in that area to achieve international standard gradients and curves with new bypasses around major urban centres, notably Falmouth, Port Antonio, Port Maria and Annotto Bay.
The three phase project was budgeted at US$25 million (J$1 billion ) with the Japan Bank of International Co-operation (JBIC), the Inter American-Development Bank (IDB) and the EDF providing finance.
The Minister for Transport and Works Dr. Peter Phillips said of the project: " It is critical in promoting national economic development. This new and modern roadway will provide a vital link between major north coast towns and open up hitherto untapped areas for investment in tourism and therefore should facilitate businesses."
Bosung Engineering and Construction Company Limited (BECCL) had the lowest bid of the seven local and foreign contractors that were shortlisted under selective tendering and won the contract to construct the Highway, with the first phase commencing in September 1997 and scheduled to be completed in December 1999. That deadline was never met and was extended by seven months with Bosung experiencing financial problems with its home operations.
In April of last year after protracted talks with the Government as to the release of funds the Korean company downed tools and the entire project remained in abeyance. At the time only 50 per cent of the work was completed with Bosung collecting around US$13 million of the US$25 million total.
Bosung and its team of local contractors resumed work in September of last year with a new deadline of December 31, 2001 set for completion. The delays and problems has added a further cost of between US$10 million to US$15 million onto the entire project.
On Monday, the Minister for Transport and Works Dr. Peter Phillips said that the Government has already reviewed the bids for the second phase of the North Coast Highway which covers roadways between Montego Bay and Ocho Rios but had to finalise details surrounding land acquisitions before awarding the contract. The second phase is expected to cost approximately US$65 million.
The Prime Minister's decision to "re-visit" the North Coast Highway may well have implications for that other road project- Highway 2000.
Again this highway project will be constructed in three phases spanning several parishes and should cost about US$840 million.
Phase One is expected to cost US$246 million and will run from Kingston to Mandeville, while Phase Two which will stretch from Bushy Park in St. Catherine to Ocho Rios in St. Ann could cost around US$213 million. Phase Three from Mandeville to Montego Bay will cost about US$381 million.
Much of the funds for the project are expected to come from bilateral and local sources and the recovery of the cost of the project is due to come from road tolls. Motorists travelling from Kingston to Montego Bay using the highway may be asked to pay between $250 and $300 in toll charges.
Both engineering and construction powerhouses Dragados of Spain and Bouygues of France have now submitted bids to develop the 230 km toll highway. Both companies are renown for stipulating that financing is securely in place and that caveats do not destabilise the construction process.
During the briefing the Prime Minister disclosed the intention to remove specific major roadways within the cities and towns throughout the island from being the responsibility of local government, placing them instead under the umbrella of the Ministry of Transport and Works.
