Beijingâ€™s China Communications Construction Company, parent of infrastructure giant China Harbour Engineering Company, last week 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 comes on the heels of a 21 June US$730 million agreement for construction of the 68-kilometre four-lane North-South Highway linking Jamaican capital Kingston with resort town Ocho Rios on the countryâ€™s north coast.
The two documents mark a significant shift for China Harbour Engineering Company (CHEC) 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.
Last weekâ€™s 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.
As an illustration of how the partnership is likely to function, Juneâ€™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, incorporating it into the new Kingston-Ocho Rios road.
CHECâ€™s investment will be funded by a combination of internal resources, boosted by loans from the China Development Bank. Kingston will make no financial commitment to the project, and provide no loan, revenue or traffic-volume guarantees.
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, communicationsÂ and related industries.
CHEC is already the chief contractor on Kingstonâ€™s US$400 million Jamaica Infrastructure Development Programme, which includes construction of the Rio Grande Bridge and the Westmoreland Bridge in St Mary.
CHEC 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.
The 22 July signing ceremony took place at the Office of Jamaican Prime Minister Portia Simpson-Miller. Chairman of China Communications Construction Company Zhou Jichang and Jamaicaâ€™s Minister of Transport, Works and Housing Dr Omar Davies initialled the document, witnessed by Ms Simpson-Miller and CHEC Chairman Sun Ziyu.