Jamaica’s government is considering selling its remaining 20 per cent ownership of the Jamaica Public Service Company to employees and the public.
Minister of Industry, Commerce, Science and Technology, Phillip Paulwell, told The Gleaner yesterday that Government was also considering selling shares in the Petrojam oil and ethanol refineries on the same basis.
“It will provide some cash but, most importantly, it would give Jamaicans a stake in the business and facilitate some level of employee participation, and it would encourage greater loyalty,” said Mr. Paulwell of a potential JPS offering.
The United States-based Mirant paid US$201 million for its 80 per cent share of the JPS in 2001. However, the National Investment Bank of Jamaica, at the time, valued JPS at US$251 million. The sale was seen as necessary at the time to balance the forthcoming budget.
Since then the company has invested billions of Jamaican dollars to improve its efficiency and generating capacity. Last September the company’s entire share value was estimated at approximately US$350 million (J$22.6 billion). The 20 per cent holding would then have been valued around US$70 million (J$4.55 billion).
JPS head of Government and Regulatory Affairs, Sam Davis, said the company would have no problem with such an arrangement. “The shareholders agreement with the Government allows government to sell its share if it so chooses and we’d be happy to partner with whoever buys them.”
Opposition Spokesman on Finance, Audley Shaw, said the Jamaica Labour Party would need to consider the matter further before commenting.
The Petrojam oil refinery is currently undergoing a US$250 million upgrade in cooperation with Venezuela, to be completed in 2009. A share offering for the oil refinery would likely come after this date, and for the ethanol before, said Mr. Paulwell.
He said that shares in the oil refinery would be offered to Venezuela as well as locally, although Government would retain some. Government currently owns 51 per cent of the ethanol refinery with the rest owned by the Brazil-based Coinex.
Danny Roberts, president of the Union of Clerical, Administrative and Supervisory Employees, which represents JPS workers, welcomed the news, saying that the union had long advocated employee share ownership.