Jamaica Highway 2000 case study explores lessons learnt for PPP projects
Highway 2000, implemented in Jamaica at a total cost of USD1.3 billion, remains the largest project ever implemented in that country. It is recognised as paving the way for other large, complex public-private partnerships (PPPs) in Jamaica, including the 2016 privatisation of the Kingston Container Terminal.
A new case study, published by the Caribbean Development Bank (CDB), looks at the road to implementation for Highway 2000, the lessons learnt and explores how the project provided a blueprint, in many ways, for the development of Jamaica’s PPP strategy.
“Highway 2000 impacts the lives of hundreds of thousands of Jamaican citizens on a daily basis. This case study contrasts both phases of the project, and looks at lessons of experience learnt, not just for Jamaica, but also for other Caribbean countries seeking to explore PPP projects,” said Daniel Best, Director of Projects at CDB.
The first phase, the East-West Highway, was implemented by open tender, won by French contractor Bouygues Travaux Publics, while the second phase, the North-South Link, was an unsolicited proposal from China Harbour Engineering Company Ltd (CHEC).
The study explores the challenges that emerged in financing such a large project, especially in a relatively un-proven environment.
“Initially, the first phase of the East-West Highway was financed by commercial lenders. Later on, multilateral development banks refinanced the project, which led to higher social and environmental safeguards being integrated into the project.” said Brian Samuel, author of the study and Head of Public-Private Partnerships at CDB.
The study explores the extent to which Highway 2000 has proven its utility for Jamaicans, and raised Jamaica’s profile as an investment destination. Although the Government’s contribution into the project was more than originally anticipated, Highway 2000 generated USD825 million in foreign direct investment (FDI).
The study concludes: “Highway 2000 reflects positive trends in the Jamaican economy: FDI, tourist arrivals and the World Bank’s Ease of Doing Business Rankings have all shown upward movement within recent years. Hopefully, Highway 2000 will propel Jamaica further along the “road” to economic prosperity.”