Peter Espeut
I have returned to Jamaica to find that toll fees have been increased - for my class of vehicle from J$1.60 to J$1.80 - by 12.5 per cent. The given reason is that since the contract between the concessionaires and the Government guarantees them a certain level of profit - in U.S. dollars - and the Jamaican dollar has devalued, they are due an increase.
This is good business if you can get it, for no matter how inefficient you are or how poor the service you offer is, your profit in foreign currency is guaranteed. This is not fair trade or good capitalism. Where is the element of risk? Where is the competition? Where is it that market forces set the price? This toll road operates like a monopoly with price-fixing; the price is fixed, not in relation to the intrinsic value of the service being offered, or in relation to the price of a similar service offered elsewhere, but in relation to the guaranteed rate of profit in U.S. dollars. This is not business; it is a money tree! It is a cash cow!
MORE THAN DEVALUATION
In December 2004 when the $1.60 toll was set, the exchange rate was US$1=J$61.4; now it is US$1=J$65.5, a depreciation of 6.7 per cent. Why do we have to pay a 12.5 per cent increase in toll charges when the Jamaican dollar has devalued by only 6.7 per cent? Obviously more is involved than just devaluation. Let me speculate. It could simply be that the costs of operating the toll road have increased. Another possibility is that they are attaching the cost of constructing the next section of the toll road to the costs of operating the present stretch, and so the additional toll charges mean that we are paying in real terms to build the new section - and then later on will have to pay toll charges to drive on it! And then the rate of profit will be calculated on the value of the stretch of road that we financed with our toll fees! Another possibility is that the usage of the present toll road has fallen, and the additional increase in the toll is to give the concessionaires their guaranteed profit.
Every so often, they announce that usage of the toll road has surpassed their best projections. Every time they make that claim, road users should demand a reduction in toll charges, since the amount of the toll is calculated on the basis of pessimistic projections. But I don't believe that usage is above projections; every time I travel on it I notice how empty the road is. I think they are losing their shirt! There was a media kerfuffle about something like that a few months ago which was quashed. I hope that we are not being misled.
EVALUATE SUCCESS STATEMENTS
To forestall future rosy claims, I call upon the toll road authorities to tell us in advance what their pessimistic projections are and what their best projections are, for the new section soon to be opened, so that later on we can evaluate their statements about success. I am not a gambling man, but I bet you they won't!
Which of the explanations for the toll increase above devaluation do you prefer?
The last time I wrote about the toll road (December 2004), I pointed out that one of the signs on the new section directed motorists to the airport on 'T2'. Some friends of mine on the way to the airport one afternoon followed the signs, only to have to retrace their steps because the causeway was closed to traffic in that direction. I asked for the signs to be covered, and I am happy to say that they have done so.
But in that column I also pointed out the injustice of the toll calculations, which has not been addressed. The toll charge is calculated based on me travelling from one end of the road to the other. If I travel Caymanas to Sandy Bay, or Spanish Town to Old Harbour or Freetown to Caymanas, I pay the same toll charge. The present toll price is unjust and unfair because it is a flat rate. Justice demands that I only pay for the distance I have travelled. A system must be put in place where I pay for the distance I actually travel on their highway. Why does the Government approve a system which forces me to pay for what I have not used?
Peter Espeut is a sociologist and is executive director of an environment and development non-governmental organisation.
