The state-run Jamaica Urban Transit Company’s (JUTC) fleet of public passenger buses is to be expanded over the next 14 months, with the acquisition of an additional 200 units from the Belgian firm, Jonckheere Bus and Coach N.V., at a cost of €67.5 million (J$8.6 billion).
Funding is being facilitated through two loans negotiated between the Jamaican Government and a consortium of banks, headed by the Commercial Bank of Belgium (Commerzbank Belgium), and including the DZ and AKA Banks in Germany.
The 200 units, comprising Volvo and VDL models, are expected to have similar features as the last 100 buses received during the last six months, which include air conditioning and technological tracking systems, all of which will have the national standard of black, green and gold. The first 40 buses are expected in the island by March 2010, with incremental deliveries thereafter, culminating with the final arrivals in November 2010. The acquisitions are expected to bring the total number of units in the system to close to 500.
Finance and the Public Service Minister, Hon. Audley Shaw (left), greets Belgian Ambassador to Jamaica, His Excellency Frederic Meurice (centre), on his arrival at the Ministry’s National Heroes Circle offices in Kingston, today (September 8), for the signing of two loan agreements, totalling euro 67.5 million (J$8.6 billion) to the Jamaican Government, from a Commerce Bank of Belgium-led consortium, for the purchase of 200 buses from the Belgian firm, Jonckheere Bus and Coach N.V., to boost the fleet of the state-run Jamaica Urban Transit Company (JUTC). Looking on is the Bank’s Vice President, Mr. Jacques Nyssen.
Finance and the Public Service Minister, Hon Audley Shaw; Vice President of the Commercial Bank of Belgium, Jacques Nyssen; and Head of Business Development at AKA Bank, Germany, Doris Icke, inked the agreement on behalf of the stakeholders, during a ceremony at the Finance Ministry’s National Heroes Circle offices in Kingston, today (September 8).
Outlining the details and terms of the package, Mr. Shaw said the financing is being provided in two tranches. The first, he explained, will see the allocation of a €9.8 million (J$1.25 billion) interest free buyer credit (interest free loan) for the supply of the first 40 buses. The repayment conditions, the Minister said, will entail 22 equal semi-annual payments over an 11-year period, with six to 18 months moratorium.
The second tranche of the financing comprises a commercial loan of €57.6 million (J$7.35 billion) for the supply of the remaining 160 buses. Repayment, the Minister said, will be in 14 semi-annual payments over a seven-year period at a fixed rate of 4.95 per cent per annum, payable semi-annually, with six to 18 months moratorium.
Finance and the Public Service Minister, Hon. Audley Shaw (centre, seated), looks on as Head of Business Development at AKA Bank, Germany, Ms. Doris Icke (left), signs a copy of the euro 67.5 million (J$8.6 billion) agreement from the Commerce Bank of Belgium-led consortium, of which AKA is a part, for the provision of a loan to the Jamaican Government for the purchase of 200 buses for the state-run Jamaica Urban Transit Company (JUTC). Copies of the document were also signed by Mr. Shaw and the Commerce Bank of Belgium’s Vice President, Mr. Jacques Nyssen (right, seated). Looking on (from right) are: Belgian Ambassador to Jamaica, His Excellency Frederic Meurice; Transport and Works Minister, Hon. Michael Henry; and a member of the Finance Ministry’s staff.
“The conclusion of these agreements is timely, as the Organisation for Economic Co-operation and Development (OECD) has recently withdrawn Jamaica from the list of countries that are deemed eligible to receive concessionary funding. As a result, the financing received for the purchase of these 200 buses constitutes, for now anyway, the largest OECD soft loan to Jamaica,” Mr. Shaw said.
Noting the “excellent relationship” shared by both countries for several years, the Finance Minister pointed out that Belgium has facilitated a number of loans to Jamaica on “highly concessionary terms.”
“The Commerce Bank, in particular, has provided financing for several major projects, including the Half-Way-Tree Transport Centre, the Spanish Town and Lyndhurst Road bus depots, and several financing contracts for the purchase of buses over the years,” he informed.
Since 1996, Jonckheere has supplied some 374 buses to Jamaica, resulting in an improved public passenger transport service within the Kingston Metropolitan region.
Noting the timeliness of the acquisition of the new buses, Transport and Works Minister Hon. Michael Henry, said with the expiration of the National Transport Co-operative Society’s franchise, the JUTC will be seeking to pursue a “new approach” to servicing certain routes in the Corporate Area.
Belgian Ambassador to Jamaica, Frederic Meurice, described the agreement as a testament of the Jamaican Government’s confidence in its relationship with the European nation, and the quality of its products.
“We know that Jonckheere buses are high quality products and they come with a price. So, we recognise the effort, under the difficult (economic) circumstances, that is being made by the Jamaican Government, and we are confident that in the future, the Jamaican public will be totally satisfied with the decision that is being taken now,” the Ambassador said.
Vice President of the Belgian Commercial Bank, Jacques Nyssen, who is also Honorary Belgian Consul to Jamaica, said despite the economic downturn, the loan was made possible, “because we are convinced that this (public transport) project will be conducted well under a committed Government and efficient management of the public transport system in Kingston.”
Head of Business Development at AKA Bank, Germany, Doris Icke, welcomed the opportunity afforded them to co-finance the undertaking, while Vice President of VDL Jonckheere, Rini Vermuelen, said it was an example of the level of co-operation that could be achieved among stakeholders.
Managing Director of JR Wellington Import/Export Corporation Limited, local representatives for Jonckheere for 16 years, Rennie Wellington, gave his company’s commitment to giving the requisite support to enhance the public transportation sector.