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Is Jamaica’s Logistics Hub Happening?

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By all indications, Jamaica’s rollout of the Global Logistics Hub Initiative (GLHI) is still on, and in a big way. Jamaica is on the road to fulfilling its aim to be the fourth global logistic connection point on a scale similar to Dubai, Singapore, and Rotterdam. Jamaica has her eyes fixed on becoming a logistics-based economy in the medium to long term. Indeed, a logistics-based economy drives growth and job creation.

Jamaica’s Logistics Hub will help Economic Growth

With the opening of the expanded Panama Canal on June 26, 2016 (after about a year’s delay), Jamaica has no choice but to continue with its initiatives to become a strategic connection point for transshipment cargo.  Geographically, Jamaica in a perfect position to accept post-Panamax vessels moving from the Asia-Pacific region. Post-Panamax vessels refer to those that are larger than the maximum length, width, and depth that the original Panama Canal accommodates.  So, these mega ships now have a direct shipping lane from the Pacific Ocean to the Atlantic Ocean (that is the Eastern Seaboard and South Atlantic).

Furthermore, the Jamaican government is still committed to the implementation of the Special Economic Zones (SEZs). These SEZs are to be located near to the major ports and airports to make it easier for the country’s manufacturing sector to benefit from the improved connectivity. Strategically, Jamaica through a developed Logistics Hub will be in striking distance of an 800-million market across the Western Hemisphere.

The GLHI and SEZs are indeed big developments that require bipartisan support and fixity of purpose.

Making Progress

The upgraded Kingston Container Terminal. This is one of the many initiatives Jamaica is undertaking to prepare itself to be the region’s Logistics Hub for larger cargo ships.

In fact, Jamaica has made strides in the implementation of the Global Logistics Hub Initiative and the Special Economic Zones. Here are just two highlights:

  • The Kingston Container Terminal was divested in 2016 to CMA-CGM, the third-largest shipping line in the world. CMA-CGM has upgraded the Port of Kingston at a cost of approximately US$400 million. Physical and technological upgrades along with the dredging of the Kinston Harbour to accommodate the post-Panamax ships took place.
  • The Kington Port upgrade contributed approximately US$728 million to the island’s GDP for the 2016-17 period. As Jamaica Trade and Invest Promotions Agency, JAMPRO reported in 2017, investment in the logistics sector grew.

JAMPRO’s CEO, Dianne Edwards said:

“It is really no wonder that in the 2017-2018 financial year, JAMPRO facilitated US$315,000,000 in capital expenditure spend in Jamaica, an increase from the US$58,000,000 in the 2016-2017 financial year. The numbers tell the story and we are focused on improving that performance in the next year.”

 Logistics Hub Master Plan

Meanwhile, the Government of Jamaica launched its Logistics Hub Master Plan in 2018. Within this Master Plan are initiatives to develop approximately 3,900 hectares islandwide at a cost of more than US$28 billion. Notably, among the logistics infrastructure to be developed within a five-year horizon are:

  • The railway system, with a first phase targeted for Montego Bay, the tourism capital, and running to the southwestern part of Jamaica;
  • The Kingston Logistics Park, including a significant portion of land around the Kingston Container Terminal (KCT);
  • Caymanas Economic Zone, to enable investment in light manufacturing, financial services, software development, value-added logistics, and distribution;
  • Approximately 2,900 acres of land at Vernam fi­eld to be developed into a cargo aerodrome, industrial centre and warehousing facility;
  • The Norman Manley International Airport, which is one of three international airports in the island;
  • The Caribbean Maritime Institute converted into the Caribbean Maritime University;
  • HEART Trust/NTA to provide training in logistics services;
  • Highway improvements particularly the North Coast highway linking Ocho Rios to Montego Bay, and the North-South leg of the Highway 2000 Project;
  • The proposed investment in the South Coast highway from Harbour View to Port Antonio;
  • Also, expanded air cold storage facilities and cargo warehouses at the Sangster International Airport.

Encouragingly, some of these infrastructure projects are currently being carried out.

Jamaica’s Improved Logistics Performance

The Caymanas Special Economic Zone is among the Government of Jamaica’s initiative in preparation under the Global Logistics Hub Initiative.

In the meantime, Anthony Hylton, Member of Parliament and Opposition spokesman on national development, physical planning and the National Housing Trust, wrote in the Sunday Gleaner on February 4, 2018, that

“The (Master) plan confirms the viability of the strategy to develop Jamaica as a fast-growing economy capable of delivering fiscal solvency and producing sustained growth in employment by becoming the hub of trading activities in the hemisphere representing a(n) 800-million person consumer market.”

Of significant note, Jamaica’s Logistics Performance Index (LPI) “took a quantum leap in 2014 from 124th position to 70th position out of 160 countries ranked.” Evidently, this massive movement in the Index is linked to the policy, legislative, and administrative reforms that the GOJ carried out and the port and road-related development projects undertaken.

Furthermore, developments in Jamaica’s energy sector such as the amendments to the All-Island Electric Licence in the Electricity Act and the introduction of the liquefied natural gas (LNG) auger well for the logistics economy. Plus, the Electric Licence allows SEZ developers, large-scale industrial users, or SEZ occupants to gain from a strategic “economic development tariff” designed to make wholesale electricity rate regionally competitive.

However, one of the concerns outlined in the Logistics Master Plan is the current inefficiencies in the Jamaica Customs Agency. Without urgent intervention to modernise this agency, Jamaica’s competitiveness in the global market will be undermined.

 Existing Gaps

Undoubtedly, Jamaica must address existing gaps to realise its vision to be a place of choice to do business, including logistics. Such shortcomings include the myriad requirements for land transactions and development applications.  To counter this shortcoming, the Master Plan recommends an adjustment to the country’s development planning framework to become more coordinated across planning processes and agencies. Furthermore, this adjustment will improve efficiency in the processing of development applications. One way to achieve this is to create a “one-stop-shop” for streamlined processing and approval of development applications.

Critically, the Master Plan also presents a development strategy for Jamaica to achieve the logistics hub vision. The development strategy covers seven enablers, 65 associated goals, and 105 actions. For the success of Jamaica’s logistics hub vision stakeholders must act on the following enablers:

  • improve institutional effectiveness;
  • ensure supportive policies and legislative and regulatory frameworks;
  • enhance workforce capacity;
  • develop efficient and productive infrastructure;
  • provide efficient transport logistics systems;
  • facilitate sustainable financing; and
  • promote the Jamaica Logistics Hub Initiative.

So, Jamaica’s ultimate success in driving a logistics-based economy through the JLHI requires a ‘whole of government’ approach. Clearly, all arms of government must work together with partners in moving forward with this initiative.

The bottom line is, nothing less will do.

Peter Parchment is a highly trained professional with twelve (12) years senior executive experience in Policy Formulation, Monitoring & Evaluation, Strategic Planning in the Public Sector, and Social Research. A strategic thinker with strong problem-solving skills, people and resource management skills and the ability to think outside the box. Equipped with sound technical report writing and consultation facilitation skills and knowledgeable in the workings of Government and the Public Service. Experienced in working with rural and urban communities in a variety of locally and externally funded projects. He is also trained in Media and Communications and writes for online clients and publications. peter@zlotonews.com

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Corporate Jamaica – Invest in Your Employees’ Wellness!

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National Salt Reduction

Invest in your employees’ wellness! That is the word from Dr. the Hon. Christopher Tufton, Minister of Health and Wellness recently. He was addressing an awards ceremony for the Work-it-Out weight loss challenge put on by the National Health Fund (NHF) at the Spanish Court Hotel on June 13, 2019.

His call came against the background of the low uptake by corporate entities in the Government’s campaign to encourage health and wellness among Jamaicans. Corporate Jamaica must see employees as the most valuable asset, the Minister asserts. Also, employees’ state of mind that enables the intellectual drive to enhance corporate competitiveness should be nurtured by motivation. Employees would be healthy and motivated to do their jobs well.

Change the Sick Profile

Indeed, Jamaica needs to change its ‘sick profile’ toward health and wellness. According to data cited by the Health and Wellness Minister, one in three Jamaicans is hypertensive, that is, living with high blood pressure. Obesity among Jamaicans is also high. The most recent Health and Lifestyle Survey, 2016-2017, reveals that one in two Jamaicans is classified as overweight or obese. Also, seven out of ten Jamaicans die from a lifestyle-related disease.

Undoubtedly, this drive toward health and wellness among Jamaicans, including employees, couldn’t come any sooner.

Staggering Healthcare Cost Burden

The cost burden on the country’s healthcare programme is staggering. The cost of care for citizens living with diabetes and hypertension alone has surpassed US$460 million. That is approximately six percent of the nation’s Gross Domestic Product (GDP). Naturally, when the cost of other non-communicable or lifestyle-related diseases is included, the healthcare bill escalates.

Not to mention the cost of healthcare to individuals. Spending on doctor’s visits, tests, hospitalization, specialist care, and other related costs is just as staggering.  In a study a little more than ten years ago, the World Bank estimated that individual Jamaicans collectively bore a healthcare cost burden, including lost income, of J$47,882 million (US$641 million) in 2006 and 2007.

Clearly, on every level, Jamaica can no longer afford to continue life without health and wellness.

Wellness in Motion – GoJ’s Jamaica Moves Campaign

The Jamaican Government has in recent years championed the Jamaica Moves campaign to motivate Jamaicans of all walks of life to take their health and fitness seriously. This campaign includes messages to Jamaicans to exercise regularly, change harmful diets, and reduce stress. Corporate Jamaica is also encouraged to participate through team weight loss programmes, of which NHF’s Work-it-Out Weight Loss Challenge was a part.

Corporate wellness programmes are not the purview of only large enterprises in Jamaica. Even small companies can actively engage their employees in health and fitness activities.

Benefits of Employee Wellness

The benefits of a healthier workforce also translate into greater employee productivity and increased profit. One can say that a healthy workforce is a productive one. Absenteeism owing to illness is reduced, and the company saves the cost for temporary replacements for workers who are off sick. Also, company resources are free to address other corporate matters instead of dealing with chronically sick employees.

On the upside, a healthy workforce is also more energetic and creative. Corporate innovation increases with healthy employees. Naturally, a holistic approach to health and wellness is vital. Not only should companies focus on their employee’s physical health, but they must address mental, emotional, environmental, and spiritual health. Evidently, successful companies are those that invest heavily in the wellbeing of their employees.

The Narrative Must Change, Says Tufton

According to Dr. Tufton,

“There are thousands of companies in Jamaica who all they care about is that you show up for work, work as hard as you can and after you leave work, it doesn’t matter to them….what happens to you as long as you show up the next day.”

The narrative must change.

The Ministry of Health has adopted “wellness” as part of its mandate (and portfolio name) to encourage Jamaicans to take more responsibility for illness prevention. Such activities to prevent lifestyle-related illnesses like heart disease, hypertension, diabetes, and obesity will transform the country into a healthier nation.

What Businesses Can Do

Among Dr. Tufton’s recommendations for employees’ wellness in corporate Jamaica are:

  • bring a doctor in once or twice per annum to conduct tests on employees’ health status;
  • engage fitness instructors to conduct workouts at the workplace at least once weekly,
  • offer healthier menu choices for employees at the cafeteria.

Of course, the sky is the limit for the innovative ways Jamaican businesses can motivate their employees toward a healthier lifestyle. If the Ministry of Health and Wellness has its way, the entire country would be (in the words of the late Hon. Edward Seaga) full of vim, vigour, and vitality.

So, let’s get moving toward a healthier, wealthier Jamaica.

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CMU Contract Puzzle Baffles PAAC

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The Chairman of the Public Administration and Appropriations Committee (PAAC) describes the CMU Contract controversy as a “messy affair.”  Revelations on Wednesday, June 12, 2019, outlines a troubling scenario surrounding the contracts issued to a US-based Jamaican consultant. The PAAC was shocked and amazed that the CMU paid Doreen Miller, a third party, just under J$4.0 million for work Gail Campbell Dunwell, the consultant, did.

A Little Under J$4.0 Paid to “Household Helper”

The amazing revelation by Professor Fritz Pinnock, head of the CMU, was that Miller was not an integral figure in the work performed by the consultant. Rather, the PAAC confirmed that she was the household help to the former Minister of Education, Youth, and Information (MOEYI) Ruel Reid. That the amount involved is a little under J$4.0 million is stunning enough. The shocker, however, was that the CMU had already paid the bulk of the contract to Campbell Dunwell; just a year inside her two-year contract.

As the CMU President explains it, the entity awarded Gail Campbell Dunwell a two-year contract valuing J$20.0 million. This contract is to raise funds from international institutions. By the end of the first year of her contract, however, Campbell Dunwell received just under J$15.0 million.

Three-Quarters of Two-Year Contract Sum Paid within One Year

Documents submitted to the PAAC show that Campbell Dunwell’s contract took effect on January 12, 2018. Yet, a mere nine days after contract signature, the consultant presented her first invoice of J$396,500 (US$3,050). Alarmingly, by February 25 of the same year, the consultant had pulled in J$11.0 million or US$86,188 for services rendered. Furthermore, the significant portion of this amount (J$9.1 million or US$70,000) was paid on six invoices all dated February 20, 2018. Her final invoice dated December 4, 2018, valued J$188,240 or US$1,448.

Professor Pinnock sought to explain that many of the projects for which the CMU paid the consultant started in 2017. Furthermore, these pre-existing projects account for the huge payments that CMU within mere months after the contract became effective.

“Well, the whole arrangement, initially, we were looking for a total of US$2 million … in grant funding, etc, etc. But when you write grant funding, you load up in the earlier part of the agreement, but the results would come a year, year and a half later,” Pinnock said.

According to the CMU president, the entity would not have entered into that agreement until it is sure that funds would have started to come into its coffers. “To get grant funding, you have to get into people’s budget, so those would start from the previous year,” he explained.

Consultant Raised Money for CMU

According to Pinnock, the CMU reaped a total of US$374,170 (around J$49.0 million) in grants and donations through the consultant’s efforts.  Pinnock sought to explain that the contract sum of US$114,000 was the maximum amount for the life of the contract to the consultant. When pressed by the PAAC Acting Chairman Mickael Phillips whether he would have paid the total amount of the contract within the first year, Pinnock responded in the affirmative. However, Pinnock’s response did not sit well with Phillips.

Another Contract with the Education Ministry

Meanwhile, Permanent Secretary of the Education Ministry, Dr. Grace McLean revealed that Gail Campbell Dunwell also had a contract with that Ministry. The contract, valued at J$3.5 million per annum, was for consultancy work for the National Education Trust (NET). The Permanent Secretary, however, told the PAAC that the Ministry suspended the contract with NET. This suspension was pending legal advice which the ministry is awaiting from the Attorney General’s Chambers.

Surprise Birthday Party Spending

The Education Ministry’s Permanent Secretary also came under fire for revelations that the Ministry hosted a surprise birthday party for the CMU president in 2018. However, Dr. McLean denied that the Ministry normally hosts surprise parties for heads of agencies and departments. She also denied that the Ministry of Education organised and hosted that party. But, Phillips quoted an email that showed that the Education Ministry was a party to the event.

Obstructing FID Investigations?

In other developments, the PAAC expressed alarm that the CMU had sought to obstruct the investigations of the Financial Investigation Division (FID) by engaging an attorney at law to block the delivery of documents requested. But the CMU head refuted that suggestion. He indicated that the CMU is complying with the FID’s request. The institution was only disputing the manner in which FID made its request.

Send Pinnock on Leave

Citing the messy affair and an apparent “free for all” that is taking place at the CMU, the PAAC Chair recommended that the CMU head and other senior officers be sent on leave. This leave should be taken pending the outcome of investigations into the CMU operations.

What next for the CMU affair? One can only wait and see.

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Richard Byles is New BOJ Governor

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The Bank of Jamaica (BOJ) has a new governor. He is Richard Byles, a 40-year business and finance veteran. The announcement of his appointment came on Thursday, June 13 from the Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke.

Mr. Byles will take up office on August 19, 2019. He will succeed the current BOJ Governor, Brian Wynter.

Byles – A Qualified, Experienced and Credible Leader

The Finance Minister in his announcement outlined the process used to search for a suitable candidate to replace Brian Wynter as BOJ Governor. The search started in January 2019 with the appointment of a Search Committee chaired by Mr. David Marston. The process of recruiting Mr. Byles was described as “open and transparent”.

“I’m very pleased that the search process has yielded an eminently qualified, experienced and credible leader in Mr. Richard Byles…” the Finance Minister said.

The Finance Minister also expressed confidence that Mr. Byles will bring a focused, principled and disciplined leadership to his role as BOJ Governor.

Richard Byles’ 40-year Career

Indeed, Richard Byles is an accomplished corporate leader whose career in business and finance spans forty years. Since 1988, Byles was well-known as the Managing Director of Pan Caribbean Merchant Bank, a post he held for four years. In 1991, Byles was appointed to lead the Pan Jamaican  Investment Trust Limited (Pan Jam) as its CEO. During his tenure which lasted thirteen years, the Pan Jam Group grew into a diversified conglomerate.

Later, in 2004 Richard Byles joined Sagicor Jamaica Life Limited as CEO. During his time with Sagicor Jamaica (which was formerly Life of Jamaica (LOJ) Limited), the entity grew through a series of acquisitions to become an insurance and banking giant. Thirteen years later, in 2017, Byles retired from the Sagicor Group but was appointed the group’s non-executive Chairman.

Richard Byles has held other significant corporate roles. He was the Chairman of Red Stripe, as well as non-executive Director in various other entities. Previously, Byles was appointed a Co-Chair of the Economic Programme Oversight Committee (EPOC) which has monitoring responsibility for Jamaica’s economic progress under the IMF’s 3-year Precautionary Stand-By Arrangement (SBA).

The new BOJ Governor holds a BSc. in Economics from the University of the West Indies (UWI). He also holds a BSc. in Economics and an MSc in National Development both from the University of Bradford, England.

During the transition period, a subcommittee at BOJ, led by Karen Chin Quee Akin, its General Counsel will assist Mr. Byles.

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