TransJamaican offers US$20.3m for new toll road concession
Highway Phase 1C to become operational in August
Published:Friday | July 19, 2024 | 12:06 AM
Toll road operator TransJamaican Highway Limited, TJH, has offered US$20.3 million to acquire the concession for the new Phase 1C of Highway 2000.
The highway company said the price offered to National Road Operating and Constructing Company Limited, NROCC, for the concession has an additional component related to potential upside-formula assessments. But it did not specify what those amounts might look like.
TransJamaican Highway had first right of refusal over the contract to operate and maintain Phase 1C, which runs from May Pen to Williamsfield, and having exercised it, the Jamaican government gave its nod to the financial offer, subject to contract and additional conditions. The approval paves the way for TransJamaican and NROCC to finalise a concession contract, which will extend to November 20, 2036.
The new concession will add a fourth toll road to the company’s portfolio, all located on the Highway 2000 corridor. TransJamaican already operates Phase 1A – Caymanas to Sandy Bay; Phase 1B – Sandy Bay to May Pen; and the Portmore leg. They span the parishes of St Catherine, Clarendon and now Manchester.
The announcement of the new concession comes robust business for the toll operator.
TransJamaican Highway, which held its annual general meeting on Tuesday, is attributing the increased usage of its toll roads and improved efficiency in the collection of toll fees for its record level of profit.
It came amid a substantial drop in operating expenses, which the company attributed to its buyout of toll road operator Jamaica Infrastructure Operators in December 2022.
“The US$23.97 million profit that we made this year is the highest we have ever made in the 23 years of operation of this company,” TJH Managing Director Ivan Anderson said of the company’s annual results for 2023 at the meeting.
The earnings were generated from revenues of US$75.2 million, collected from a record 27.1 million vehicles utilising the toll points on Highway 2000. The number of vehicles using the highways was up five per cent over 2022.
For the first quarter ending March 2024, TransJamaican reported a 9.9 percent increase in toll collections and 39 per cent increase in net profit over the corresponding quarter in 2023.
Toll collections amounted to US$19.78 million, up from US$17.99 million. Profit grew to US$6.9 million from US$4.98 million.
Anderson said it is costing the company less to collect per transaction, the results of a benchmarking study conducted with the aid of consultancy firm KPMG has shown. The total cost to collect was US 37 cents per transaction, which was 16 per cent higher than the best companies in the world, but below the international average, Anderson said.
Regarding Phase 1C, Anderson said at the meeting that the new toll point is expected to open in August.