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100% toll increase coming?
Finance ministry wants to end $22-m subsidyBY INGRID BROWN Sunday Observer staff reporter
browni@jamaicaobserver.com
Sunday, January 20, 2008
PORTMORE toll charges are likely to double by month-end if Transport Minister Mike Henry caves in to pressure from finance ministry officials pushing for a 100 per cent increase for the toll operators in an apparent bid to rid the state of the monthly $22-million subsidy it now absorbs.
HENRY. has to make a decision my month-end
An official source told the Sunday Observer that the finance ministry was in favour of granting the operator's demand for a more than 100 per cent increase in order to eliminate or significantly reduce the subsidy.
Such a move would, however, run counter to a promise made by the Jamaica Labour Party (JLP) - including Prime Minister Bruce Golding - while in Opposition that it would renegotiate the agreement with the toll operators to lower the rates, especially to ease the burden on residents of Portmore.
At present, cars, sports utility vehicles and large vehicles pay a toll of $60, $100 and $200, respectively.
According to the source, the finance ministry was putting pressure on Henry to make a decision by the end of January.
The Sunday Observer was told that Henry had hoped to stall the process while a fresh contract could be inked with the toll road operators. The minister, the source said, was hoping to renegotiate the contract to extend the period from 30 to 40 years, and look for lower interest money.
"In the long run, he wants to renegotiate the rate and extend the repayment period beyond 30 years, but that takes more time than the finance ministry is willing to give," the source said.
When pressed for a response last week, Henry would not say when the increase would be granted or how much it would be.
He said an increase was, however, imminent since the former People's National Party (PNP) Government had not granted previous obligations for a toll increase.
"You and I are paying for it, so I have to look at refinancing the whole thing and extend the period and see how I can adjust it in the future," the minister said, adding that his response to the operators had to relate to what was in the Government's financial structure.
"My policy approach for toll roads is that ultimately the user must pay. Therefore, in the developmental process, when you build toll roads, you must be sure you attract the economic development to relate to the economic value of the road," Henry said.
"You cannot build toll roads unless you know how it is going to be paid for," he added.
But former mayor of Portmore George Lee said Portmore residents would not stand by and allow for a 100 per cent increase.
"It would be shocking if a hundred per cent is granted; not only that, persons would find it impossible to pay, but it would be a total reversal of the decision of the JLP leadership who promised on the campaign trail to roll back the amount, and that they would seek to have renegotiations," Lee argued.
He said all along there was an attack on the $60 fee, and vowed he would have to join those who are strongly opposed to such measures.
The Sunday Observer was also told that it was being said in some JLP circles that the party had no obligation to the Portmore residents since they voted in the majority - at the September 3, 2007 general elections - for the PNP, which had imposed the toll.
"A significant body of opinion is seemingly behind the position that Portmore voted for the PNP, surprisingly against the JLP's clamouring then, for downward adjustments to the toll rate," the source said.
This factor, he added, has strengthened the position behind the finance ministry's focus on eliminating or substantially reducing the subsidy of the toll road operations.
The source said Henry's plan is to not have the toll charges reaching three-digit figures, however, if the finance ministry continues to press for it, he would be faced with very little choice.
"Henry now has the unenviable task of navigating his way out of a minefield before him, in terms of securing a compromise among the toll operators, the finance ministry, the motoring public of Portmore, the taxpayers in general, and balancing a number of political considerations attached to the Portmore toll issue, all within the next two weeks," the source said.
The Portmore leg of Highway 2000 was built at a cost of US$100 million, but the imposition of a toll after the old road was converted into a six-lane expressway drew condemnation from Portmore residents. They said the toll was an infringement of their constitutional right to travel freely.
A group of aggrieved residents, mostly members of the JLP, took the previous Government to the Supreme Court and the Court of Appeal, before making a last-ditch attempt with the United Kingdom-based Privy Council, last October, for a roll back of the charges.
However, Privy Council law lords ruled last December that the imposition of a toll would not prevent the residents from having unrestricted access to their properties.
Under the existing toll arrangements, the operators are entitled to apply for rate increases every six months, based on a number of factors, including the rate of inflation and the exchange rate.
Efforts to get a comment from the operators were unsuccessful.
The source said a minimum toll of $100 or more will no doubt spell difficulties for the Government ahead of potential snap elections this year if the PNP's constitution challenges to the eligibility of some Government MPs to hold seats in Parliament are successful.
Also, having wrestled the Portmore mayoral seat from the PNP, the JLP would be optimistic of making further inroads into the political representation of the Sunshine community, hence the party's need to stave off a dramatic increase to the toll rate.
Finance ministry wants to end $22-m subsidyBY INGRID BROWN Sunday Observer staff reporter
browni@jamaicaobserver.com
Sunday, January 20, 2008
PORTMORE toll charges are likely to double by month-end if Transport Minister Mike Henry caves in to pressure from finance ministry officials pushing for a 100 per cent increase for the toll operators in an apparent bid to rid the state of the monthly $22-million subsidy it now absorbs.
HENRY. has to make a decision my month-end An official source told the Sunday Observer that the finance ministry was in favour of granting the operator's demand for a more than 100 per cent increase in order to eliminate or significantly reduce the subsidy.
Such a move would, however, run counter to a promise made by the Jamaica Labour Party (JLP) - including Prime Minister Bruce Golding - while in Opposition that it would renegotiate the agreement with the toll operators to lower the rates, especially to ease the burden on residents of Portmore.
At present, cars, sports utility vehicles and large vehicles pay a toll of $60, $100 and $200, respectively.
According to the source, the finance ministry was putting pressure on Henry to make a decision by the end of January.
The Sunday Observer was told that Henry had hoped to stall the process while a fresh contract could be inked with the toll road operators. The minister, the source said, was hoping to renegotiate the contract to extend the period from 30 to 40 years, and look for lower interest money.
"In the long run, he wants to renegotiate the rate and extend the repayment period beyond 30 years, but that takes more time than the finance ministry is willing to give," the source said.
When pressed for a response last week, Henry would not say when the increase would be granted or how much it would be.
He said an increase was, however, imminent since the former People's National Party (PNP) Government had not granted previous obligations for a toll increase.
"You and I are paying for it, so I have to look at refinancing the whole thing and extend the period and see how I can adjust it in the future," the minister said, adding that his response to the operators had to relate to what was in the Government's financial structure.
"My policy approach for toll roads is that ultimately the user must pay. Therefore, in the developmental process, when you build toll roads, you must be sure you attract the economic development to relate to the economic value of the road," Henry said.
"You cannot build toll roads unless you know how it is going to be paid for," he added.
But former mayor of Portmore George Lee said Portmore residents would not stand by and allow for a 100 per cent increase.
"It would be shocking if a hundred per cent is granted; not only that, persons would find it impossible to pay, but it would be a total reversal of the decision of the JLP leadership who promised on the campaign trail to roll back the amount, and that they would seek to have renegotiations," Lee argued.
He said all along there was an attack on the $60 fee, and vowed he would have to join those who are strongly opposed to such measures.
The Sunday Observer was also told that it was being said in some JLP circles that the party had no obligation to the Portmore residents since they voted in the majority - at the September 3, 2007 general elections - for the PNP, which had imposed the toll.
"A significant body of opinion is seemingly behind the position that Portmore voted for the PNP, surprisingly against the JLP's clamouring then, for downward adjustments to the toll rate," the source said.
This factor, he added, has strengthened the position behind the finance ministry's focus on eliminating or substantially reducing the subsidy of the toll road operations.
The source said Henry's plan is to not have the toll charges reaching three-digit figures, however, if the finance ministry continues to press for it, he would be faced with very little choice.
"Henry now has the unenviable task of navigating his way out of a minefield before him, in terms of securing a compromise among the toll operators, the finance ministry, the motoring public of Portmore, the taxpayers in general, and balancing a number of political considerations attached to the Portmore toll issue, all within the next two weeks," the source said.
The Portmore leg of Highway 2000 was built at a cost of US$100 million, but the imposition of a toll after the old road was converted into a six-lane expressway drew condemnation from Portmore residents. They said the toll was an infringement of their constitutional right to travel freely.
A group of aggrieved residents, mostly members of the JLP, took the previous Government to the Supreme Court and the Court of Appeal, before making a last-ditch attempt with the United Kingdom-based Privy Council, last October, for a roll back of the charges.
However, Privy Council law lords ruled last December that the imposition of a toll would not prevent the residents from having unrestricted access to their properties.
Under the existing toll arrangements, the operators are entitled to apply for rate increases every six months, based on a number of factors, including the rate of inflation and the exchange rate.
Efforts to get a comment from the operators were unsuccessful.
The source said a minimum toll of $100 or more will no doubt spell difficulties for the Government ahead of potential snap elections this year if the PNP's constitution challenges to the eligibility of some Government MPs to hold seats in Parliament are successful.
Also, having wrestled the Portmore mayoral seat from the PNP, the JLP would be optimistic of making further inroads into the political representation of the Sunshine community, hence the party's need to stave off a dramatic increase to the toll rate.