Garth RattrayWHEN THE Gleaner recently reported the intermittent and temporary closure of the Old Harbour bypass by the National Works Agency (NWA), to facilitate blasting for the Highway 2000 toll road, my mind flashed back to the days when the restrictions on motor vehicle importation were eased.
Originally about 20,000 used Japanese cars were imported each year. In time that figure probably peaked around 80,000. The Japanese are always happy to sell their used domestic vehicles to countries like Jamaica in order to make way for the new ones. I understand that in 1995 they were forced to dump used cars in the ocean to avoid market stagnation.
The revised importation policy attempted to appease the public. People needed more mobility but emphasis should have been placed on importing large public transport units, resurrecting/-extending the railway system and maybe even investing in ferries. I was concerned for our long-term financial and environmental well-being. Another apparent motive for freeing up the used car market was the collection of enormous duties and GCT on imported vehicles. Tax revenues would also come from motor vehicle licences, fitness-certificate fees, insurance certificates, fuel taxes, GCT on the sale of car parts and garage maintenance/repair fees.
The administration effectively killed two birds with one stone. The downside of importing hundreds of thousands of used cars is the outflow of scarce foreign exchange to purchase replacement parts and petrol and to construct new roads/highways. Imported vehicles would eventually become a fiscal burden because only a tiny fraction of units generate foreign income. Traffic congestion, exhaust fumes and the adverse environmental impact of constructing new roadways are always a concern. The preponderance of motor vehicles proved to be an investment opportunity for many entrepreneurs, the government being no exception. Used car dealers and car parts suppliers anxious to partake of the windfall sprang up all over the place. Almost every vacant lot soon displayed used Japanese cars or parts for sale.
Then came Highway 2000, the product of 'natural progression' and a political boon for the PNP. The government used the National Road Operating and Constructing Company (NROCC), to manage its interest in Highway 2000. Tolling has always been big business. By some estimates half the total number of US corporations formed in the first half of the 19th century were tollway companies. The overabundance of the motor car in Jamaica is being facilitated and exploited at the same time.
The contract for the construction of the highway was awarded to TransJamaican Highway (owned by Bouygues Travaux Publics of France). They are to build, own and then operate the road for 35 years. The first segment of the phase under construction will have tolling points at the Old Harbour bypass, at the new bridge to replace the Portmore Causeway, at the Dyke Road in the vicinity of the Mandela Highway, and at the Spanish Town interchange.
Bouygues Travaux Publics is a subsidiary of Bouygues Const-ruction, a large construction company with worldwide activity, particularly in buildings, public works, roads, offshore and onshore operations. It is a European leader in the field of public works. It boasts a 1998 turnover of 500 million euro for a total number of 4,500 employees. In other words these people know a good investment when they see it.
As with other highway privatisation programmes long-term investments, especially pension funds, were considered desirable. They bought into the Real Return Convertible Bond boasting a '30-year, tax-free, inflation-indexed and government-guaranteed instrument that will make a real 4.5 per cent interest payment semi-annually.' Bouygues is committed to putting up at least US$40 million in equity. This highway will make commuting easier but it also represents pure investment for profit-driven multinationals and locals alike. Commuting was never a free ride; motorists have always paid dearly for the privilege of using the road. And now it is estimated that when the toll system is implemented anyone using the 14.2-kilometre Old Harbour bypass could spend $47 each way (rates will vary according to vehicle type large vehicles pay more).
It was agreed that the toll rate would not go above seven US cents per kilometre. This will be applied at the manual and automatic toll booths in Jamaican currency and is (supposedly) in line with international rates. Rates set in US currency is a burgeoning trend. Quoting in US currency provides a permanent buffer against inflation and exchange rate variations. To maintain that buffer the rates are often calculated speculatively and higher than the average bank rate.
If the maximum figure is indeed seven US cents per kilometre, it will be somewhat expensive especially when one considers that the highway construction does not entail any major engineering feat like massive bridges and tunnels. The rates in the USA are lower than our projected figures. The Pennsylvania turnpike has a toll rate of only 2.6 US cents per kilometre. The Garden State Parkway costs a mere 1.4 US cents per kilometre. The Greensburg bypass costs 4.8 US cents per kilometre. The Ohio turnpike costs 2.1 US cents per kilometre.
If motorists find the toll rates prohibitively expensive, the government plans to subsidise it. This would defeat the basis for the toll, but I suspect that it will happen anyway. It is very likely that the toll, although obviously necessary, will initiate an incremental increase in transportation costs for people, goods and services that will in turn precipitate a new round of inflation. In order to contain commuting/transportation costs, the government should still invest heavily in public transport and encourage car-pooling.
I am also very concerned that the toll highways will be paved with security problems. They will probably provide yet another avenue of opportunity for ambush by nefarious characters and for vandalism and thuggery. We need some reassurance from TransJamaican Highway and its sister company Bouygues Travaux Publics that there exists the machinery for maintaining moderate toll charges and guaranteeing the safety of motorists. We certainly don't want to become victims of any kind of "highway robbery."
Dr. Garth A. Rattray is a medical doctor with a family practice.
