CEO of National Works Agency Highlights Benefits of Highway 2000

Chief Executive Officer (CEO) of the National Works Agency (NWA), Ivan Anderson, has said that Phase I of the Highway 2000 Project, is estimated to yield almost three times as much economic benefit, as the cost it had incurred.
He also pointed out that the entire Highway 2000 Project is expected to add approximately $26 billion to the country’s Gross Domestic Product (GDP).
Mr. Anderson was speaking at the recently held Friday Policy Forum, which was hosted by the Management Institute for National Development (MIND), at its Old Hope Road campus.
The CEO, who was speaking on the topic, ‘Toll Roads, Their Role in Development: New Corridor Options for Jamaica’, told the audience that the benefit cost ratio of Phase I was between 2.7 and 2.9 and that the highway was “overall on sound fundamentals”.
Phase I of the project is the portion of the highway from Bushy Park in St. Catherine to Sandy Bay in Clarendon.
The NWA Head, who has broad training in investment appraisal and management from diverse universities, including Harvard University, pointed to findings in World Bank studies, as contributing to the present approach to infrastructural development.
He told the audience that studies, which examined the impact of investment on economic development, have shown that roadways and highways have the single largest impact on the society.
“Impact of the order of 28 per cent in terms of the economic rate of return to the country. and this is why we’re focusing on the highway development programme,” he stressed.
All things being equal, he noted that the Highway 2000 project is expected to add three percentage points to the GDP.
Mr. Anderson, who is also a former General Manager of the Urban Development Company (UDC), told his audience that toll roads represented a new source of financing, not coming from the general budget.
Pointing to international examples, he informed the group that in Spain and Norway, some 32 to 46 per cent of the total expenditure on their road network came from toll revenue. “So what they have done is to use the toll revenue to replace expenditure coming out of the budget,” he said.
Mr. Anderson also pointed out that toll roads provided a stable source of financing, not subject to the general fluctuations that took place in the budget.
Turning to the issue of viability, the CEO explained that efforts were made to establish routes, which would see relatively high levels of traffic, to help offset these costs.
He also noted that the cost of establishing these networks was significant. One such example is the Montego Bay Bypass Project, which is currently under consideration. Crude estimates, he informed, would put construction cost in the range of US$67 million, while land acquisition to complete the project would cost approximately US$13 million, making it a US$80 million project.
While acknowledging that these figures may seem daunting, Mr. Anderson noted that 30 years ago, when an elevated highway from Manor Park to downtown Kingston was being considered, the cost was then thought to be “horrendously expensive. but 30 years later, those monies are peanuts to what we’re spending now”.
Recognizing the need for funding outside of Government budget, but at the same time the need for infrastructural development, the CEO said that toll roads would be part of the Jamaican development strategy.