US$250 Million to Revive Rail Service

A sum of US$250 million will be invested in the resuscitation of the country’s cargo and passenger rail service by the Government and several investors, including United States (US) company Herzog International.

The project will be undertaken in segments. Phase one will see the development of the Montego Bay to Appleton leg. This is slated to get under way before the start of the winter tourist season in 2017.

The others are Phase 2a – Spanish Town to Ewarton, Spanish Town to Clarendon Park; Phase 2b – Appleton to Clarendon Park; Phase 3 – Spanish Town to Kingston; and Phase 4 – Connecting Vernamfield to the existing main line.

A non-binding Memorandum of Understanding (MOU) to formalise the arrangement was signed by the Ministry of Transport and Mining, through the Jamaica Railway Corporation (JRC), and Herzog Jamaica Limited, which is a subsidiary of United States-based Herzog International, at the Ministry’s Maxfield Avenue offices in Kingston on December  9.

The signatories included Portfolio Minister, Hon. Mike Henry; Chairman, Jamaica Railway Corporation, Ferris Ziadie; and Herzog representatives, Dr. Sean Matthew and William Gilbert.

Mr. Henry said the Government will undertake a cadastral survey to identify boundaries of lands owned by the JRC that are intended to be included in a legally binding lease agreement.

He said the revitalisation of the rail system has the potential to significantly transform the economic landscape along the rail corridor through tourism, freight, land development, communication and commuter services.

The Minister pointed out that upwards of 100 persons will be employed to the project initially.

Meanwhile, Dr. Matthew noted that more than 200 kilometres of rail will be developed, and that the Government’s intermodal plan can become profitable for everyone.

“There’s a lot of work to be done and we are committed to get it done in the quickest possible time,” he said.

He informed that starting next week, a team will be carrying out work on the island’s bridges and tunnel system so that another avenue can be developed for the transfer of goods and services across the island.

“Phase one has at least 21 bridges or tunnels that must be verified as being stable, engineeringly sound, and we have already committed a sizeable amount of money just to employ an independent firm to go ahead and do that,” he said.

For his part, Mr. Ziadie said although the task may be difficult, as it relates to the timeline for completion, once all the parties are committed to the undertaking, it will be achievable.

The primary objective of the non-binding MOU is to give Herzog the opportunity to undertake additional due diligence, including, but not limited to, securing financing, prior to making a final business-plan submission.

The MOU also sets out the principal terms and conditions under which the parties are willing to enter into a concession agreement to lease, purchase, finance, rehabilitate and/or operate the JRC assets.

Jamaica’s rail system is the second oldest in the world, having commenced operations in 1845. Rail services ceased in 1992.