Henry

The Jamaican and Belgian governments last Friday signed off on an agreement valued at approximately J$3 billion for the supply of 100 buses to be used to boost the present fleet of the Jamaica Urban Transit Company (JUTC). The funding is to be provided through the Belgian financial institution Commerzbank.

The official signing took place at the offices of the Ministry of Finance in Kingston on Friday, with Commerzbank vice-president Jacques Nyssen and Ambassador Herman Potocarero signing on behalf of the Belgian government, and Transport Minister Mike Henry and Minister of Finance Audley Shaw, for Jamaica.

Shaw disclosed that one-third of the loan would be interest free, which, he said, would be used to purchase 37 buses.

Fixed interest

The other two-thirds would attract a fixed, interest rate of 5.24 per cent and would supply the remaining 63 buses and spare parts. Shaw said the interest-free portion of the loan also included a gift package to the value of J$114 million, representing technical and management support granted by the Belgian government.

Attractive

According to Shaw, an interest rate of 5.24 per cent interest proved quite attractive as it stood in stark contrast to the average 10 per cent interest now being paid on Highway 2000 loans, which, he said, was unsustainable.

"This year alone, we're seeing an aggressive accumulation of an additional $8 billion in debt on the highway construction," said Shaw.

He said the Government would have to continue to rely on borrowed funds for critical infrastructure projects, including the construction of the downtown Kingston transport centre. He said the Government was, however, moving aggressively to acquire low-cost funding.

In the meantime, Henry said the 100 new buses would be compatible with the single-operator programme to be implemented at the bus company later this year.