The House of Representatives has approved a Government guarantee of a loan of US$340 million, from the China Export Import Bank to the Road Maintenance Fund (RMF), for the rehabilitation and maintenance of roads under the Jamaica Development Infrastructure Programme (JDIP).
Minister of Finance and the Public Service, Hon. Audley Shaw, who piloted the resolution on Tuesday (June 29), noted that the JDIP represents a major undertaking by the Government, through the Ministry of Transport and Works, to significantly improve the road network and enhance the quality of life of citizens by stimulating economic development.
“The roads slated for rehabilitation and maintenance are all part of the transportation network, and are all essential for the movement of goods and services throughout the island,” Mr. Shaw explained, pointing out that it is important that further deterioration of these roads is prevented, as it would adversely impact the economies of communities along the corridors.
The Cabinet approved the financing in August, 2009 for US$340 million to facilitate the infrastructure programme, through a Preferential Buyer’s Credit facility (PBC) from the Government of China through its Export-Import Bank.
The projects are being developed, along with the relevant designs and cost estimates. Selection is based on a prioritisation exercise that takes into account the National Transport Policy, the Road Sector Master Plan, Vision 2030 and stakeholder participation.
The terms of the loan include for a 15-year period and a fixed interest rate of 3 per cent per annum. It is repayable in 26 equal and consecutive semi annual instalments, after a grace period of two years. The debt servicing for the loan is to be met from the fuel tax revenue to be collected by the RMF.
Mr. Shaw said that to ensure that the debt servicing obligation do not fall entirely on the Consolidated Fund (Budget), it has been recommended that a dedicated fund be established from the fuel cess to service it. The Escrow Account should have specific guidelines for the use of the funds, and is to be managed independent of the Road Maintenance Fund and its portfolio Ministry.
Scope of work include rehabilitation of approximately 300 kilometres of parochial roads; rehabilitation of approximately 270 kilometres of main roads; construction of retaining walls; river training; construction of several bridges; and better periodic maintenance of roads.
Opposition Spokesperson on Finance, Dr. Omar Davies, stated that the Opposition recognised the importance of the relationship with the Peoples Republic of China, and a loan granted on such concessionary terms was greatly appreciated.
Mr. Shaw assured the House that the selection of projects would be objective. He also informed that Minister of Transport and Works, Hon. Mike Henry, will table the full programme that has been set out under the JDIP.
Mr. Henry assured the House that he will respond to questions raised by the Opposition about the programme, when he speaks in the Sectoral Debate on July 6.