Beijing’s China Communications Construction Company, parent of infrastructure company China Harbour Engineering Company, signed a two-year agreement with the government of Jamaica, paving the way for direct Chinese investment in selected infrastructure projects.
The 22 July pact follows a US$730 million agreement, signed 21 June, for the construction of a 68-kilometre four-lane North-South Highway linking Jamaican capital Kingston with resort town Ocho Rios on the country’s north coast.
In a statement the company said the two documents mark a significant shift for China Harbour Engineering Company away from its traditional role as building contractor and project manager to equity investment and finance partner, a model the company hopes to expand throughout the Caribbean and Latin America.
The latest accord, projected to create nearly 12,000 jobs, enables CHEC to partner with the Jamaican government in a range of projects, developing such infrastructure as roads, bridges, ports, waterways, shipping facilities and light railway systems, and look ahead to construction of hotels, housing, education and recreational projects.
June’s North-South Highway agreement calls on CHEC to invest US$600 million in construction while paying the Jamaican government another $120 million for control of the Mount Rosser Bypass toll road, incorporating it into the new Kingston-Ocho Rios road.
CHEC’s investment will be funded by a combination of internal resources and loans from China Development Bank. The Jamaican government will make no financial commitment to the project, and provide no loan, revenue or traffic-volume guarantees, CHEC said.
Construction of the build-operate-transfer project, scheduled to start in late 2012, will require 36 months, after which CHEC will operate the toll road for 50 years, ultimately turning it over to the Jamaican government.
Jamaican officials hope the new highway, part of a broader Highway 2000 project started in the late 1990s to upgrade local infrastructure and revitalise the economy, will spark further development, boosting employment, construction, business, communications and related industries.
CHEC is already the chief contractor on Kingston’s US$400 million Jamaica Infrastructure Development Programme, which includes construction of the Rio Grande Bridge and the Westmoreland Bridge in St Mary.
The company last year signed a memorandum of understanding with the Cayman Islands government, creating a public-private partnership for cruise-ship berthing in George Town, built by the Chinese, but operated under local control.