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