Lavern Clarke, Staff ReporterEMERGING socio-economic tensions in Jamaica now have international investors thinking twice about how they set prices for their services.
TransJamaican, the French concessionaire for Highway 2000, this week said it would not be setting the toll fee at the maximum figure allowed under the agreement to build and operate the high speed road a decision based on its fears that it could result in social fallout if motorists reacted negatively to the new charge.
The tolls at January 2001 prices were capped at $3.16 per kilometre for the standard car, double that figure for trucks under 5.5 metres long and two metres high, and triple for bigger trucks, based on the international US 3-7 cents benchmark range in which TransJamaican agreed to bill road users.
In addition to per kilometre rates, motorists using the six-lane bridge that will replace the Portmore Causeway would pay another $45.10. But on Thursday TransJamaican managing director Pascal Radde said his company considered the bridge fee much too high, and planned to take it lower.
"People are willing to pay that (the $45)," said Radde, referring to surveys done by the company on motorists' willingness to pay a user fee for the highway. "But it seems too high. It could result in social problems."
Now nine months under construction since last April by developer Bouygues Travaux Publics, sister company to TransJamaican, the first leg dualisation of the Old Harbour Bypass stretch from Bushy Park to Sandy Bay is back on track for its end of June completion following setbacks from rain in October, says project/branch director Jean-Noel Foulard.
Construction on the sole toll plaza for that section begins next week, the foundation having been laid at Vineyard/Shoppers Lane.
The toll will be payable in Jamaican dollars, but the rates are set in US currency and indexed to US inflation. More immediately, exchange rate shifts which have seen the Jamaican currency depreciating by about $5 since the cap was set two years ago, would have pushed the $3.16 open road cap higher. Motorists are looking at an initial toll bill that peaks at about $40 one way, to travel the 12-14 km stretch.
Government has the option of subsidising the toll by stipulating a lower charge than that set by TransJamaican through the toll regulator named in the new toll act as the chief executive of National Works Agency then paying the differential directly to the toll operator.
Radde's outlook on the pricing strategy is grounded in practical economic considerations. The new bridge he said will cost US$17 million (J$850 million) to build, and TransJamaican has decided that it will best recoup those costs by going after high volume usage of the bridge at lower cost, instead of charging a high toll.
He would not comment on the traffic counts, but the Financial Gleaner understands that the concessionaire's surveys are showing figures as high as 30,000 vehicles per day, more than sufficient volumes to meet anticipated revenue turnover.
Pursuing the latter high toll strategy, Radde fears, could serve to discourage motorists from using the bridge, choosing instead the longer alternate route that must be provided as an option to the toll road.
In relation to the per kilometre rates, the highway concessionaire said they too "will be below the cap" and the charges are being set "based on willingness to pay." The preliminary rates have now been calculated but will not be made public until the responsible agency signs off on them, he told the Financial Gleaner.
Meantime, Foulard says his team has completed approximately 65 per cent of the work on the Old Harbour leg, including 12 of 15 civil structures, and a fifth of the asphalting for the new surface. It has established a quarry at Hill Run to mine six million tonnes of marl, and another in the Longville, Clarendon area for another million tonnes of chemical lime.
Foulard is currently recruiting an additional ten construction professionals in preparation for start up work on the next leg from Kingston to Bushy Park, and will also be refilling positions left vacant through attrition.
As the project moves to the next segment, Bouygues will also be ramping up work on the site and stretching the schedule to include Sundays and night shifts.
"We have a tight programme," the project director said.
The site currently employs between 460 and 470, but only 250 directly. Of the total, 420 are locals. Recruits are trained in safety, quality, and environmental safeguards, with Foulard noting that the biggest challenges have been ensuring that workers desist from harmful environmental practices such as disposing of oil in a manner that does not allow it to seep into the soil; and equally to wear their safety gear and adhere to safety procedures.
An overhead view of the Old Harbour Bypass being dualised by Bouygues Travaux Publics.
