TRANSJAMAICAN Highway (TJH), concessionaires of Highway 2000, have successfully negotiated a US$130 million loan for the project through RBTT Merchant Bank Trinidad.
This loan will be used to complete construction and fund operational costs associated with Phase 1A of the project namely: the Old Harbour Dualisation and Vineyards Toll Plaza (opened in September 2003); the Kingston to Bushy Park and Spanish Town Ramp Plaza (scheduled to open in early 2005); and the new six lane Portmore Causeway and Hunt's Bay Bridge (scheduled to open January 2006).
"We feel this loan is as important a milestone as signing the concession agreement," said Trevor Jackson, Managing Director of TJH. "The finan-cing of Phase 1A is now secure, ensuring the orderly development of the project."
RBTT PROUD
The loan, which is being provided by RBTT through a bond that has been fully subscribed by Caribbean investors, was issued in two tranches and is scheduled to be repaid in seven and 10 years respectively. Part of the US$130 million will allow TJH to repay a bridging loan facility of US$50 million that RBTT had provided for the early part of the Project and which was scheduled for repayment by the end of 2004.
"RBTT is proud to be associated with this project which we feel is integral to the future of Jamaica," said Christopher Mack of RBTT Trinidad. "As we have seen in other parts of the world, the development of a country's transportation network through projects such as Highway 2000 is a catalyst for its economic development and prosperity."
"This is good news for Highway 2000," added Kingsley Thomas, Chairman of National Road Operating and Constructing Company Limited (NROCC). "It is a vote of confidence by regional investors for Highway 2000 and for Jamaica."
Phase 1A of Highway 2000 is funded at risk by equity and debt through the private sector, by TJH, and its shareholders, who will recoup their investment and repay this loan strictly through toll payments.
NROCC
The fully state-owned company, NROCC, has also acted as a source of funding for Phase 1A via a loan to the project. This loan will be repaid through the proceeds of the project. In addition, the land used in the construction of the project was purchased by NROCC on behalf of the Government of Jamaica. Through a sharing mechanism, TJH, and its shareholders cannot make excessive profits as after a certain threshold, profits are shared on an increasing basis until eventually all additional profit goes to the Government of Jamaica.
Highway 2000 is the centerpiece of a programme initiated by the Government of Jamaica at the beginning of the new millennium and is a public-private partnership structured to maximise operational efficiency and minimise costs. The organisations making up this partnership are: NROCC, TJH, Bouygues Travaux Publics Jamaican Branch and Jamaican Infrastructure Operator. Highway 2000 is intended to be a four to six lane controlled-access, tolled motorway with interchanges and intersections built to modern international standards which will eventually connect Kingston to Montego Bay and Ocho Rios. The project is divided into two phases, 1 and 2. Phase 1 is subdivided into Phase 1A (Kingston to Sandy Bay) and Phase 1B (Sandy Bay to Williams Field). Under the terms of the Concession Agreement, TransJamaican Highway Limited (TJH) has an incentive to undertake Phase 1B of the Project (otherwise equity return capped at eight per cent and a right of first refusal to undertake Phase 2 of the Project.
