The age of the borrows

[Tuff Gong]

St James Parish Council borrowing $200 million to help fix roads

MARK CUMMINGS , Observer staff reporter
Monday, March 20, 2006

Donaldson. says financial institution is very excited about the proposal
MONTEGO BAY, St James - The St James Parish Council, frustrated that its annual allotment of $50 million from the Parochial Revenue Fund is not enough to properly repair roads in that parish, says it has approached a financial institution to borrow $200 million to have the work done.

"Most of our roads are in a condition where the surface is severely deteriorated and in need of major rehabilitation, and since we are not getting the funds from central government to carry out the work, we have to go out there to seek the funds," Ian Reid, the council's secretary/manager told the Observer. He did not name the financial institution.

The proposal is being formulated under the Loans (Local Authorities) Act which gives the council the power to borrow funds from within the island, with approval from the finance minister.

"This is an unprecedented move under the Act. No council in Jamaica has ever started a process of doing anything like this," said Noel Donaldson, the mayor of Montego Bay and chairman of the St James Parish Council.

Donaldson told the Observer that the financial institution that the council has approached was very excited about the proposal and was eager to sign off on it.

In addition, he said, the Ministry of Local Government and the finance and planning ministry have indicated their support for the proposal.

"We have had meetings with the Ministry of Local Government and representatives from the Ministry of Finance and they support the idea," said Donaldson. "In fact, the local government ministry has been providing us with technical support as we work to conclude the arrangements."

The parish council says that at least 70 per cent of the 1,602 kilometres of road surface under its jurisdiction are badly eroded.

According to Reid, over the last three years, central government, through the Parochial Revenue Fund, has provided the local authority with an average of $50 million annually to maintain parochial roads in the parish. But that amount, he argued, was grossly inadequate to undertake the road improvement programme that is needed.

Reid admitted that the $200-million the council wants to borrow would not be adequate to complete the job. However, he said it was a step in the right direction.

"This money won't be enough to address the poor road conditions. It would take roughly between $1.5 billion and $2 billion to address the problem at this time; but it is a start." he said.

Reid did not give any information on the interest rate on the loan, however, he said that the council was proposing to pay the financial institution roughly $25 million annually from its allocation from the Parochial Revenue Fund.

"We are saying to the financial institution: we will give you about $25 million every year for the period of the loan and that's really how we plan to repay it," Reid said.

He said that within the next few weeks the council hopes to meet with representatives from the finance ministry to outline its proposal.

"As soon as we put together our proposal, which will include what we are going to use the funds for, how we are going to repay it, the desired results and so on, we will go to the Ministry of Finance to have discussions on it. And once they sign off on it, we can then go to the financial institution," Reid explained.

Last Thursday, Montego Bay businessman Mark Kerr-Jarrett described the proposal as "a good idea", adding that it was something that was generally accepted by the Montego Bay business community.

He warned, however, that the quality of the work to be undertaken with the funds would have to be properly monitored.

- [email protected]

St James Parish Council borrowing $200 million to help fix roads

[Hopyoneson]

Re: The age of the borrows

which part these people get them figures from 50 million, 200 million, 1 billion, is like them just drive past the road and throw out a figure based on the amount of clouds in the sky or mango pon tree..yes 15 kajillion dollars fi fix this road. di bi di bi people dem dis.

[RichD]

Re: The age of the borrows

[ QUOTE ]
which part these people get them figures from 50 million, 200 million, 1 billion, is like them just drive past the road and throw out a figure based on the amount of clouds in the sky or mango pon tree..yes 15 kajillion dollars fi fix this road. di bi di bi people dem dis.

[/ QUOTE ]

yuh have so little faith in your parish council eh...maybe dem really have people who a do dem job and are aware of the extent to which roads in the parish need repairs...and dem aware of cost so is easy to come up wid reasonable figures.

[Dr.Dudd]

Re: The age of the borrows

The problem is,does their charter allows them to borrow?
A law that allows parish council to borrow does not automatically allows them to borrow,until their charter state so.
..and what sort of bond rating they would have any way?
What assets will they use to secure the loans?
Incidentally i think it would be a good AIEA,IF THEY COULD BORROW,BUT THE LOAN SHOULD BE PUBLICLY OFFERED and the lowest bidders get the offer.

[wolmersboy]

Re: The age of the borrows

Even if it was an interest-free grant, it would take 8 years paying $25million a year to pay off that loan.
With interest payments....it could get ugly.
Having said that, I applaud the out-of-the-box thinking to go and find another source of money to carry out the business of the people. Good luck to all involved!

[Hopyoneson]

Re: The age of the borrows

I just have a fault with the lack of robustness of the figure, 200 to 2 billion is a huge number, I find it hard to take at face value what people tell me in a culture where "work wid mi nuh" is prevalent. In dealings in Jamaica I never pay first price offered, even in the professional field, I have worked with lawyers to farmer a country thats just not how the place work, so yes call me skeptical.

[Tuff Gong]

Re: The age of the borrows

[ QUOTE ]
Even if it was an interest-free grant, it would take 8 years paying $25million a year to pay off that loan.
With interest payments....it could get ugly.
Having said that, I applaud the out-of-the-box thinking to go and find another source of money to carry out the business of the people. Good luck to all involved!

[/ QUOTE ]

Not good!

#1 abolish the so-called Local Government before they all become Local Borrowing Agents.
Jamaica is too poor, too small, and too corrupt to have 16 Governments.

#2 let us hear the details of this loan, let us see the study done about the true cost to fix these roads.

#3 sue the Central Government for the money. Jamaica's debt portfolio increases by at least Ja$9Mil every hour, what is this money being used for?

[Hopyoneson]

Re: The age of the borrows

[ QUOTE ]
#2 let us hear the details of this loan, let us see the study done about the true cost to fix these roads.

[/ QUOTE ] seet deh, mek mi see what yu plan on spending the money pon, too much slackness a gwan fi mi trust no body with dem breed a money deh. Dat a just common sense approach to bidness.

[Tuff Gong]

Re: The age of the borrows


Did the road ever get fixed.., wonder?