Minister of Finance and Planning, Hon. Dr. Peter Phillips, is advocating adoption of the Build Own Lease (BOL) model in financing critical infrastructure and development projects locally.
He said the model is a creative innovation being practised in developed and developing countries and should be used for projects in Jamaica. “It is an example of the kind of creativity that we hope to see in the Jamaican economy to bring new projects and products on stream,” he stated.
Minister Phillips was speaking on April 11 at the official groundbreaking ceremony for the MegaMart Mandeville branch, which is being constructed through a $1.2 billion BOL deal with Scotiabank.
The store will be built to MegaMart specifications, and will be leased to the food store chain for an initial 20 years with option for renewal every five years thereafter.
In lauding the initiative, Minister Phillips said the BOL arrangement not only has relevance for private sector investment, but for project development activity in the public sector, as part of a public/private partnership being put in place.
“In a time of fiscal stringency, there is ample opportunity for us to use this kind of mechanism to expand the infrastructure of the public sector schools, hospitals, road systems and the like,” he noted.
Stating that the BOL model has a bearing on maintaining stable interest rates, the Minister said, “we intend to make this and other types of investments more feasible, because we are committed to doing all we can to ensure that interest rates remain low."
“We do not intend to see a return to the days when investors can rely simply on purchasing high-priced government paper as a means of earning their living. We are intent on maintaining low interest rates and reducing government spending on resources that should go to the private sector."
He urged all investors, who have the resources, to look at BOL as an option that will allow the state to continue to provide services, “while at the same time, having a valuable asset on the balance sheet of the private investors”.
Construction of the Mandeville MegaMart store is slated for completion in 11 months and will provide employment for some 300 persons.
By Garfield L. Angus, JIS Reporter