Editorial | Public private partnerships and transparency

The Government has understandably preened over the fact that it isn’t borrowing to rebuild the Troy Bridge between the parishes of Manchester and St Elizabeth that collapsed over three years ago. It will be paid for directly from taxes – all J$231 million.

That, however, doesn’t mean that the Government is flush with money with which to fund all of Jamaica’s infrastructure needs.

Indeed, as laudable as the Troy Bridge achievement is, the government still faces significant financial constraints that limit its capacity to invest in infrastructure – at a time when the need is great.

In the circumstances, public private partnerships (PPP) or P3s remain a critical tool for financing large infrastructure projects. Its use should be accelerated.

But that has to happen in a context of greater transparency and public accountability than is the norm. In other words, the Government, going forward, must be more open about P3 deals.

PPPs, endorsed by multilateral financial institutions such as the World Bank and the IMF, are a growing phenomenon in developing countries where governments are often strapped for cash. But they are also used in developed countries.

The 27-member European Union (EU), for instance, last year registered €13.6 billion in PPP projects. That, in monetary terms, was up 22 per cent on the previous year although the number of projects declined 17 per cent. Germany was the most active EU state for P3s.

One US company that tracks PPPs projected their value would have climb to over US$170 billion in 2023, an 11 per cent increase on the previous year, largely on the back of an appetite for such schemes unleashed by the Biden administration’s Infrastructure Investment and Jobs Act that made available $550 billion for infrastructure and green energy related projects across the country.

UPFRONT CAPITAL

Generally, under PPP ventures, the private sector provides upfront capital and technical expertise, helping accelerate the completion of essential projects.

In Jamaica, for example, while the Highway 2000 road development scheme was promoted by the government’s National Road Operating and Constructing Company (NROCC), the first segments of the east-west corridor was developed by the French company Bouygues Travaux Publics (it later brought on other partners) under a build, own, operate and transfer (BOOT) scheme.

Similarly, the north-south leg of Highway 2000, between Kingston and Ocho Rios, which started by Bouygues, was eventually fully built, and is now operated, by the Chinese state company, China Harbour Engineering Company Limited (CHEC).

CHEC’s investment of over US$700 million was probably the largest single investment ever in Jamaica.

Dependent solely on the government, such big investments might have otherwise been delayed due to budget limitations.

However, questions remain about the transparency and accountability of some PPP arrangements.

A case in point is the promised tolling of Highway 2000 Section 1C (May Pen to Williamsfield) of the east-west corridor.

TransJamaican Highway Limited (TJH), the vehicle established by Bouygues and its partners to develop and manage the road, declined its first right of refusal to build the 27 kilometre May Pen to Williamsfield leg. The government, through NROCC, undertook the project with a US$188-million Chinese loan.

TJH is now a publicly traded company, in which NROCC is a minority owner.

Currently there is an implicit agreement for TransJamaican and NROCC, its owner, for TJH to operate the new leg of the highway.

FURTHER DELAYED

Apart from an announcement that the toll-free period was further delayed from the last implementation date of August 17, and TJH’s public statement that it has offered the Government US$20 million for the asset, not much has been shared with the public.

The arrangement included the implementation of toll fees to ensure the maintenance and long-term viability of the highway. Yet, as of now, there has been no clarity on what this tolling agreement entails, when it will be enacted, what are the implications for taxpayers, and what is the final cost of the road.

The lack of information on this matter raises concerns about the oversight and execution of such critical arrangements. Transparency in these matters is essential to ensure that they serve the public interest and provide value for money.

Jamaica’s path forward must involve a comprehensive approach to infrastructure development that prioritises both resilience and efficiency.

This means not only building stronger, climate-adapted structures but also addressing the longstanding neglect of rural and interior roads. The country needs a balanced strategy that invests in both high-profile projects like highways and the less visible, yet equally critical, local roads that serve the broader population.

Achieving this will require more than just financial investment; it will demand political will and leadership, improved governance, and stronger public engagement.

Enhanced transparency in procurement and PPP processes, coupled with streamlined project delivery, can help ensure that not only infrastructure projects are done, but completed on time and within budget.

Moreover, adopting a more inclusive approach to planning, one that involves local communities and considers their specific needs, will be vital for building trust and ensuring that the benefits of infrastructure development are widely shared.