My Thoughts on Technology and Jamaica: January 2010

Saturday, January 16, 2010

How South Coast developement in Clarendon necessary for JLP victory

The JLP (Jamaica Labour Party) is now in a very peculiar pickle.

This as evident from the recent public broadcasts by the Prime Minister of Jamaica, Bruce Golding, in an attempt to allay the fears of the people of Jamaica with regards to the raft of recently announced taxation packages.

It can also be seen in the now concluded deal with the Banks and Securities Traders to swap higher interest rate short term Government Bonds for lower interest rate longer term Government Bonds, said to save the Government of Jamaica some US$40.1 billion in this financial year, as stated in the article'No more skylarking' - PM outlines economic programme and debt exchange”, published Thursday, January 14, 2010 by Arthur Hall, Senior Staff ReporterThe Daily Gleaner.

The Prime Minister of Jamaica exhorted Jamaican bondholders to “share the burden that must be borne at this critical juncture in our journey through this unprecedented period of crisis” a not so attractive offer.

But in light of the fact that they had been making handsome profits from Government of Jamaica Bonds over the years, it must have seemed poetic justice to know that they would be “taxed” in a manner that would enshrine their acceptance of the Prime Minister’s terms of the bond swap as patriots, country first and whatnot.

But not only is the Jamaican Economy in a financial rut, the JLP itself is also in a political dilemma, for although the Prime Minister has stated in Parliament that “bold leadership, not leadership that strives for popularity is what is now required”, he must still drink of the poison chalice that his decidedly unpopular taxation policies will yield: the possibility that the JLP may not be re-elected come General Elections, slated to occur in the next two and a half (2 ½) years from now.

However, all may not be as it seems, as the level of alacrity which the Prime Minister Bruce Golding is showing in drinking this deadly potion, the eagle-eyed John Public, whether he has a penchant for the JLP’s brand of political bravado or not, must obviously see that the good Prime Minister has an ace up his sleeve.

He has some plan to redeem himself and resurrect, as it were, the fortunes of his Party between now and the next General Elections, some unseen hidden potion or antidote he will administer to his Party to change the fortunes of the JLP in the run-up to the General Elections in a cruel twist of fate just at the right opportune moment.

For those with a gumption for reading long winded documents, not only is this letter of a similar ilk, but the document from which I and John Public perceive the Prime Minister’s salvation for the JLP, no matter what the political fallout is equally and wholly so: The Jamaica Labour Party’s Election Campaign Promises

In the Jamaica Labour Party’s Campaign Promises, lies the answer, the magic elixir, the Holy Grail that can save the JLP from sure death and bring about a comeback from the brink of a political isolation and wilderness that his “arrogant” stance, to quote the words of Senator Omar Davies, Opposition Spokesman on Finance, as uttered in Parliament, has created.

This comeback will be like never before seen, no matter how unpopular Prime Minister Bruce Golding financial policies, which are in truth, to be fair to the Prime Minister, are authored by Senator Audley Shaw, Finance Minister. Many will no doubt admire Prime Minister Bruce Golding’s strong show of leadership swagger, so characteristic of a much younger and charismatic elder statesman Michael Manley, may God his Soul Keep.

Portia Simpson Miller, leader of the Opposition PNP (Peoples National Party), previously however, was willing to take potshots and gain political mileage at the expense of his eminence, rousting the people of Jamaica with much gusto by haughtily declaring that he only acted to repeal the initial taxation packages after initially ignoring the “people’s cries” and twisting the political knife to the hilt by adding, rather mischievously that he “made the people cry”.

However, putting political theatre performances worthy only of a Pantomime aside, I am specifically referring to his campaign promises to broker a Social Partnership between the Private Sector and the Government of Jamaica with regards to the restoration of key pieces of Infrastructural Development in Jamaica.

Specifically the completion and restoration of Spring Plains/St. Jago Farms and rebuilding, refurbishing VernamField and other Aerodrome Facilities, completion of the Highway 2000 Project and the liberalization of the Electrical Power Generation Sector.

These major projects are not only key to the fortunes of the JLP, but would mark the foray of the present day political powers-that-be into a direction never before attempted, which is the rebuilding of Infrastructural with the assistance of the Private Sector.

This is for profit for the Private Sector and the benefits to the Government of Jamaica of increased Tax Revenue and increased employment for the people of Jamaica with the eventual aim of allowing Jamaica to do something that which it has not done under the stewardship of the PNP: grow.

Spring Plains/St. Jago Farms properties are currently under the stewardship of the NIBJ (National Investment Bank of Jamaica), which has been charged with their divestment of the currently idle lands to potential investors, among who it is rumored to be several local and foreign interests.

In the area where I live in Rest, Milk River, Spring Plains/St. Jago Farms was a source of massive employment in the 80’s and a technological marvel to many, as equipment and tractors, never before seen by any of the people in the area, as some recalled, were brought into the Development and farming of this fertile valley by Mr. Eli Tisona, an Israeli investor who had ploughed millions of investors money into developing the hundred of acres of fertile land during the 1980’s.

But Spring Plains/St. Jago Farms was not just the dream of a foreign investor. At the time, it was an agricultural showpiece of the then Prime Minister Edward Seaga.

A model of what the Jamaica farm of the 21st century would look like, growing sweet potatoes, sweet pepper, mangoes and other fruits and vegetables, built with the financial blessing of the then Government of Jamaica as a part of a “winter vegetable” project in order to produce crops of all varieties both for the export, the surplus being sold on the local market. However despite the good intentions, bumper crops and the employment that this utopian vision of farming may have engendered among the people working in the area, it was not economically feasable.

From the very day that it began operation during period from 1982 to 1986 within which the farm was said to be productive, it incurred losses of nearly JA$135 million as stated in the article Spring Plains divestment awaits Cabinet approval, published publishes Saturday 7th April 2002 by Petulia Clarke, The Daily Gleaner.

According to the article, Eli Tisona was himself later banned from entering Jamaica in 1998 by the ruling PNP as he had been convicted of narcotics trafficking and money laundering charges in the United States of America, though the JLP has pointed out that his convictions occurred after the failure of Spring Plains/St. Jago Farms.

Since then there have been numerous attempts to divest the lands by the PNP, but to no avail, as each investor who approached the then Government of Jamaica had ideas but could not provide financial funding to support their ambitions and neither could they demonstrate that they could make the farm profitable.

A difficult task, as most large scale farms are rarely profitable due to praedial larceny, water wastage, high interest rates of local and foreign borrowing, the high cost of input material, the unstable commodities market and competition from farming powerhouses such as China and North and South America who heavily subsidize farming in their countries.

Today the Spring Plains/St. Jago Farms properties are being utilized by Grace Kennedy in their Agro Grace Aquaculture Facility which raises Fresh Water Tilapia for local and export markets. Jamalco also mines the hills for bauxite and the remaining Spring Plains lands have been graded and the overgrowth removed, ostensibly by the JLP, as the activity on the land began as recently as 2009. Is this a sign of a return to farming on these still fertile yet idle lands?

Even more interesting is the projects currently ongoing island wide to resuscitate the various Aerodromes across the island, namely, Boscobel in St. Mary, Ken Jones Aerodrome in Portland, Tinson Pen Aerodrome in Kingston and Vernamfield Aerodrome in Clarendon. The champion for all these projects appears to be Mr. Earl Richards, the president of the AAJ (Aircraft Association of Jamaica.

Mr. Earl Richards has been successful thus far in getting the Cabinet to approve a US$100 million refurbishing and expansion of the Boscobel Aerodrome as stated in the article 100m upgrade for Boscobel aerodrome”, published: Friday March 20, 2009 by Mark Titus, Business Reporter, The Daily Gleaner.

Feasibility studies for the Ken Jones Aerodrome have indicated that the region is too mountainous to be even considered as an aerodrome, news that must surely make business interest in St. Thomas and Portland think that the Government of Jamaica has betrayed them

The Aerodrome is less than four (4) hours drive from the Norman Manley International Airport and Kingston and the Aerodrome would have resulted in much needed Development in terms of road, bridges and bring increased patronage which would improve the lot of those who call St. Thomas home.

Already, they may even possibly argue, millions of dollars have been lavished by the previous PNP led administration, despite the waning importance of Air Jamaica to Tourism. Possibly, one wonders, the JLP may be keeping the Development of this key piece of infrastructure up its sleeve until another more opportune time?

Whatever the reasoning of the Government of Jamaica, it is at least comforting to note that Tinson Pen Aerodrome relocation to Caymanas Park in St. Catherine and the refurbishing of the Vernamfield Aerodrome is still on the cards, despite the arguments of the critics, who state that the cargo business may be affected by a revitalized Vernamfield Aerodrome.

These critics it seems have overlooked the fact that the Vernamfield Aerodrome is in Senator Mike Henry’s Constituency, and as such will inevitably be of great interest to Senator Mike Henry, Minister of Transport and Works, to have it up and running again, both as a means of attracting foreign investors, guaranteeing support for the JLP in the soon-to-come General Elections

It is also a means of securing tenure of term in his Constituency, irregardless of the fortunes of the JLP. Currently the Tinson Pen Aerodrome is the property of the Port Authority of Jamaica and is being used to store cargo and the Vernamfield Aerodrome is dumped up with soil and gravel to prevent its usage by drug smugglers as a landing strip for small craft.

Vernamfield Aerodrome is said to be soon used as a base and barracks of the Jamaica Defense Force in the interim in 2010, though this information cannot be substantiated, as no activity has been observed by residents living in Gimme-Me-Bit, who are closest to the Vernamfield Aerodrome.

There is also word of the extension of the Highway 2000 by Bouygues Travaux Public, which at one point in 2008 was cleared by the OCG (Office of the Contractor General) of any wrongdoing as it relates to their contract and their thirty-five (35) year concession.

Which, under the Contractor General Act was seen as “fair, transparent and meritorious” and allowed Bouygues Travaux Public to build the Highway in two phases, Phase 1 and Phase 2, according to the article “All's air in award of Highway 2000 Project - OCG”, published Tuesday January 15, 2008, The Daily Gleaner!

Phase 1 consists of Phase 1A (Kingston to Sandy Bay); Phase 1B (Sandy Bay to Williamsfield) and Phase 2 consists of Phase 2A (Bushy Park to Ocho Rios) and Phase 2B (Williamsfield to Montego Bay).

The Mount Rosser Leg, also known as Phase 2A (Bushy Park to Ocho Rios) was temporarily halted in July 2009 due to problems related to financing the venture, as stated by Senator Mike Henry, Minister of Transport and Works, according to the article “Highway 2000 work to resume shortly - Henry”, published Saturday July 11, 2009 by Gareth Manning, Gleaner Writer, The Daily Gleaner.

Since then, work has been halted on all Phases of the Highway 2000, which is slated to pick up in 2010.Even less has been heard about the intended divestment of the Jamaica Railway Corporation, as many attempts to divest the Jamaica Railway Corporation to China and India have since failed.

This is mainly due to contractual obligations to Bouygues Travaux Public, with whom the previous PNP had signed the contract for the construction of the Highway 2000, obligations which forbid the Government of Jamaica to honor any contracts signed after the signing and commencement of works by Buoygues Traveaux Publix on the Highway 2000 Project which would compete with the Highway for Revenues for the next thirty-five (35) years.

The Electrical Power Generation Sector has also been slated to be soon Liberalized between the years 2010 and 2012, in several speeches made by Senator Paul Robertson, Minister of Energy and Mining in Parliament in 2009. This is necessary, as currently the Power and Utilities Act, guiding piece of legislation that governs the Electrical Power Generation Sector of economy, allows only for the JPS Co (Jamaica Power Service Company) to be the sole producer and distributor of Electrical Power in Jamaica.

Currently, there are other Electrical Power producer, such as JEP (Jamaica Energy Partners) in Old Harbour, which has two (2) floating Power Barges, Doctor Bird 1 and Doctor Bird 2 as well as JEPP (Jamaica Energy Power Partners) which resell their Electrical Power to JPS Co at a slightly higher price, which is reflected in the consumers IPP (Independent Power Producers) charge that appears on your Utility Bill. Part of what may be driving this push is the possibility of supplies of LNG (Liquid Natural Gas) from the Peoples Republic of Trinidad and Tobago.

According to the article “LNG for Jamaica a national priority - Manning”, Published Friday June 26, 2009 by Linda Hutchinson-Jafar, Business Writer, The Sunday Gleaner, Prime Minister of Republic of Trinidad and Tobago, Patrick Manning, has stated that LNG for Jamaica is a “national priority” with Republic of Trinidad and Tobago supplying Jamaica with LNG (Liquid Natural Gas) to Jamalco so as to lower the cost of the production of alumina

This would then be shipped to the Alutrint Facility in Republic of Trinidad and Tobago to be smelted and converted to Aluminum.

According to another articleNo Trinidad LNG for Jamaica anytime soon”, published Friday December 15, 2006 by Linda Hutchinson-Jafar, Business Writer, The Sunday Gleaner the Republic of Trinidad and Tobago had drilled a Test Well at a cost of US$80 million and had found no oil or LNG, hence they decided they were unable to supply Jamaica with LNG due to unavailability of supply.

The fact that there is now a supply of LNG coming to Jamaica, possibly by 2010 - 2011, with a possibility of more due to increased competition from LNG suppliers in China, the Middle East and Far East countries.

According to the articleRivalry sends Trinidad in search of New LNG Markets”, published Saturday July 4, 2009 by Linda Hutchinson-Jafar, Business Writer, The Sunday Gleaner the market for LNG has since changed for Republic of Trinidad and Tobago LNG since 2006, as stated by Robert Riley, Chairman and CEO (Chief Executive Officer) of BP Republic of Trinidad and Tobago.

Currently there is no central body or cartel that controls the price of LNG worldwide, much in the same way that OPEC (Organization of Petroleum Exporting Countries) controls the price of oil worldwide. These producers, for who LNG is merely a by-product as they produce more valuable chemicals such as methanol and ammonia, can flood the LNG Market with large and cheaper volumes of LNG.

The United States of America is Republic of Trinidad and Tobago’s largest buyer of LNG and thus the possibility exists that these cheaper suppliers of LNG can effectively compete with Republic of Trinidad and Tobago for supply to the United States of America, presently the largest current and future user of LNG, as the United States of America, under an initiative spearheaded by President George W. Bush, is looking to Renewable Energy as a means of reducing the United States of America’s dependence on Foreign Oil.

As such, LNG is part of the Renewable Energy for the United States of America for its Domestic Supply of Fuels along with Biodiesel and E80 to be used for Electrical Power Generation and Motor Vehicle Fuels respectively. I am hoping that the Republic of Trinidad and Tobago has into account the current Recession worldwide and the fact that Republic of Trinidad and Tobago has decided to supply us with at least one (1) train of LNG.

There is the possibility of getting additional three (3) trains of LNG from Republic of Trinidad and Tobago by 2011-2012 as the market for LNG from Republic of Trinidad and Tobago begins to contract due to the availability of cheaper LNG  from LNG suppliers in China, the Middle East and Far East countries.

As such, for Republic of Trinidad and Tobago’s survival in an Unregulated LNG Market, it is most likely the Republic of Trinidad and Tobago would consider the option of selling the additional three (3) trains of LNG to us.

The fact is that Republic of Trinidad and Tobago cannot and will not be able to find any market for it, as it will be too expensive in the future. Trinidad and Tobago’s current markets Chile and Brazil are being courted by LNG suppliers in China, the Middle East and Far East countries, suppliers, who, because of economy-of-scale can effectively compete with Republic of Trinidad and Tobago in terms of Pricing and Volume of Supply.

It would thus be in the Government of Jamaica’s and the Government of Republic of Trinidad and Tobago’s best interest with respect to fixing the Trade Deficit that exists between the two (2) countries as well as Republic of Trinidad and Tobago’s Trade Deficit with CARICOM to display a strong interest in the recovery of the entire CARICOM Trading Bloc by selling the additional three (3) trains of LNG as suggested above to Jamaica and CARICOM with benefits to Jamaica in:

1.      Electrical Power Generation
2.      Public Transportation (Jamaica Urban Transport Association, Jamaica Railway Corporation, etc)
3.      Private Passenger and Carrier Vehicles modified with flex fuel engines to use LNG, E80, Bio-Diesel, etc.

All of which would be a massive multibillion dollar boost to Electrical Power and Energy Sector in a liberalized framework, guaranteeing the Energy Security of Jamaica both now and in the foreseeable future and securing tenure of term of Senator Paul Robertson, Minister of Energy and Mining in his Constituency, irregardless of the fortunes of the JLP

This is very relevant, especially with reports of Global Oil Prices possibly set to increase due to peak in oil production in the next five (5) years ) as stated in the articleIEA official warns of shrinking oil supplies: Report”, Sunday August 2nd, 9:04 pm ET, AFP, Yahoo News.

These scientific findings are backed up by the dire warning in statements attributed to Sir Richard Branson of Virgin as stated in the article “World faces Oil Crunch by 2015”, published Sunday 14 February 2010, AFP, The Jamaica Herald hearken the coming of higher Oil Prices by 2015AD.

So with all this hurried Development being undertaken by the Government of Jamaica, how has the Private Sector being involved? So far, few Private Sector companies have made any major forays into the infrastructure and construction side of the Public Sector.

Possibly with the exception of the Telecommunications Provider Merit Communications, which through its company Merit Development, has since 2008 gone into developing and selling upper and middle income housing Developments, according to the articleTelecoms firm enters housing market”, published Wednesday December 30, 2009 by Dionne Rose, Business Reporter, The Sunday Gleaner.

One would therefore hope that the other Telecoms Providers may also have such Development partnerships in the works as opposed to their usual charitable giveaways via their various Foundations i.e. Digicel Foundation and the Cable and Wireless Foundation, which are merely a means by which Telecoms Providers, who are really FDI’s (Foreign Direct Investors), satisfy the conditionality of their Bilateral Trade Agreements with the Government of Jamaica by way of charitable donations, visible to all, and thereby garner tax exemptions.

The current deployment of their high speed 3G HSDPA (High Speed Downlink Packet Access) and UMTS (Universal Mobile Telecommunications System) and 3.5G WiMaX 4G Mobile (IEEE 802.16d,e) network across the island of Jamaica can in a sense be said to be an investment in infrastructure that will be of great benefit to Jamaica.

This is especially for the younger generation in education and in jumpstarting the service sector and e-commerce, provided that the Government of Jamaica can move quickly enough to enact CyberCrime Legislation, especially as the number of attempts to breach secured systems is expected to increase.

Evidence of this can be seen from the recent scam involving ScotiaBank (Bank of Nova Scotia) in which persons are reportedly sending around emails requesting PIN numbers from clients to access their accounts, albeit this will prove to be a major threat in the future

With the growing access by the general public to wireless internet and computer systems as evident from the case involving the theft of nearly JA$10 million in call credit from Digicel by 26 year old Martin Philpots as stated in the articleAccused cyber scammer alledgedly rips off Digicel $10M in Call Credit”, published Friday, August 28, 2009,  Paul Henry, Observer Staff Reporter, The Jamaica Observer.

There are similar ongoing cases of computer hacking involving illegitimate bank transfers via ACH (Automate Clearing Houses) used in online banking in the United States of America as stated in the articleCyber Attackers Empty Business Accounts in Minutes” published Thursday August 6, 2009 3:10PM EDT by Robert McMillan, IDG News Service.

Of even greater concern is the fact that it is now possible to intercept and listen in on conversations on GSM mobile networks that still use the older A5/1 codebook (and later on mobile networks that still use the A5/3 codebook) using equipment that can be easily found here in Jamaica

Information on how it can be done which is now freely available on the internet, made available to the world thanks to the research of Dr. Karsten Kohl and the Open Source community, as stated in the article  “Q&A: Researchers Karsten Nohl on Mobile eavesdropping”, published January 1, 2010 4:00 AM PST by Elinor Mills, InSecurity Complex – CNET News.

Once these problems, which may or may not exist in the Telecoms Providers Networks here in Jamaica, are addressed via the appropriate CyberCrime Legislation and tightening of Network Security, then it can be truly said that the efforts of the Telecoms Providers can be seen as Infrastructural Development for Jamaica – in the Voice and Data Telecoms Sector.

However, this is as it relates to the business of these Telecoms Providers and not to physical Infrastructural Development, such as Farming, Aerodrome Facilities Development, Freight Transportation Services i.e. Railways, Electrical Power Generation and Distribution and most notably Housing Development which Merit Communications has pioneered and shown can be a profitable venture.

Perhaps, I often opine, one of the Telecoms Providers could develop the Milk River Bath Spa in conjunction with Spanish Tourist interests, who are all too eager to get their hands on more Jamaica real estate, especially as with the current economic climate, there is a desire to acquire assets dirt cheap, build on the bare slate that such an investment presents itself and make profits when the boom times return.

Thus the obvious is made clear.

As the Government of Jamaica is now moving forward after the completion of the negotiations with the Banks and other Securities Traders that has resulted in a historic “New Deal” for Jamaica, burgeoning with promise of growth for our stagnant Economy choked off by the seaweeds of an over inflated and excessive high interest rate regime whose original intent and purpose has been achieved.

The JLP must also engender and encourage a similar partnership with the Private Sector, particularly with those companies who have the most foreign capital and expertise, to invest in Jamaica in terms of physical infrastructure i.e. Farming, Aerodrome Facilities Development, Freight Transportation Services i.e. Railways, Electrical Power Generation and Distribution, Housing Developments

The aim: for these companies not only to gain tax exemptions but also to achieve Profit Maximization, Diversification in the long term while assisting the Government of Jamaica and the people as a whole to “step up inna life” and move our country forward towards 2030 – and whatever perils we may encounter on the way towards the dream of prosperity.

Is this a foreshadowing of things to come? Is this a part of the Jamaica Labour Party swan song to victory at the polls come 2012-2013? Only time will tell……