:: POLICY AND PROCEDURES ::   The Jamaican privatisation programme began in the early 1980s with the divestment of public services and small entities which were a burden on fiscal resources, such as garbage collection services, parks and markets, and public cleansing (e.g. street cleaning, etc.) Since then, approximately 107 enterprises in a variety of industries have been privatised by the National Investment Bank of Jamaica. These entities range from manufacturing to utility companies; and include shares and ownership in the Cement Company, Trans-Jamaican Airlines, Telecommunications of Jamaica (now Cable & Wireless JA), Eastern Banana Estates, Victoria Banana Company, Jamaica Grains and Cereal, Caribbean Steel, and Radio Jamaica, among many others. Through its privatisation policy, the Government aims to reduce its role in commercial activities while focusing on measures that bring greater efficiency to the economy. In this way, the Government encourages creative entrepreneurship, fosters economic growth and frees central government from burdensome commercial activities. The privatisation policy is part of a wider strategy to liberalise the Jamaican economy, creating a more competitive and market-driven environment that will facilitate broadening the ownership base of local companies. In June 1991, NIBJ became the central implementing agency for privatisation activities, charged with administrative and operational responsibility for effecting divestitures in accordance with the broad objectives and principles of the programme. The privatisation of each entity – service or asset – is conducted by the Bank’s personnel, with input from other relevant Government agencies, to achieve the following objectives in accordance with generally accepted privatisation objectives: Make the bureaucracy more responsive to developmental needs (by removing excessive ‘red tape’) Secure greater efficiency in the operations of the enterprises Reduce the drain on Government's fiscal resources Optimise the use of Government's management resources Secure enhanced access to foreign markets, technologies and capital Widen the ownership base and direct equity participation in the economy :: THE PROCESS::   The privatisation process includes the following: The entities to be privatised will be advertised Market-based valuations will apply in establishing the disposal price Transactions will be arms-length and all bidders will be evaluated using a common set of criteria Public announcements will be made when an entity is privatised The Government, through NIBJ, conducts a privatisation feasibility study in order to determine the value, the proposed modality and assess the potential implications of the completed privatisation transaction. NIBJ would normally then prepare Information memoranda and invite proposals for the entity/assets to be privatised. The Government utilises a number of methodologies for transferring ownership and risk to the private sector. No single methodology is predetermined. Methods of Privatisation The privatisation modalities are as follows: i. Sale of enterprise ii. Lease of enterprise or entity iii. Joint ventures iv. Public share offers v. Management contracts and buyouts vi. Sale to employees – Employee Stock Ownership Programme (ESOP) of management teams vii. Private tenders viii. Public auctions ix. Concession - Build, Own, Transfer (BOT); Build, Own, Operate (BOO). Acquisition of Lands/Assets Where a prospective investor wishes to acquire land that is not the subject of a Request for Proposal, or where unsolicited written proposals are submitted to NIBJ for a project, the proposal should include: A brief profile of the proposed business Background of principals Business plan Sketch plan of the area identified Proposed terms of divestment Offers received from prospective investors are usually evaluated on the basis of the following criteria: 1) The price the investor is prepared to pay (which must be stated) 2) The comprehensiveness of the Business Plan that is submitted with the proposal and which should include: a) Development plan for the entity. How the facilities will be operated e.g. i) Details of technology to be used ii) Number of persons to be employed iii) Management personnel and previous experience; b) The marketing arrangements. c) Cash flow projections (with explicit foreign exchange inflow). d) Financing arrangements in respect of acquisition price and project implementation (conclusive evidence of financial capability is to be provided). e) An indication of intention to ensure that the protection of the environment is observed, in accordance with acceptable environmental standards and practices. Incentives for investors For information on the above please navigate to the Jamaica Promotions (JAMPRO) web site: http://www.investjamaica.com/investment/incentives.htm :: REGULATORY FRAMEWORK::   Factors Important to Investors Investors have indicated that the following factors are the most important areas of interests, with regard to the entities being privatised: i. Regulation by an independent authority. ii. Provision of basic infrastructure by the Government. iii. Identification of framework for private sector to get guaranteed returns. iv. Market for service or products of entity to be divested must be steady or growing. v. The pace of Government approvals. vi. Allocation of other risks between the Government and the investor, such as: Foreign exchange remittances Risk in operations Political interference. :: REGULATORY AGENCIES ::   It is necessary to develop a regulatory framework for the operation of an entity, during the process of negotiation. The framework should prescribe the terms and conditions for all activities to be undertaken, outline procedures to deal with all possible eventualities and detail procedures for monitoring. It is necessary that a regulatory body be appointed to undertake effective regulation and monitoring. The following regulatory agencies/local authorities/institutions are available to assist investors with the implementation of their proposed projects: • Office of Utilities Regulation (OUR) • Fair Trading Commission • National Environment and Planning Agency (NEPA) • Parish Councils • Jamaica Public Service Company Limited • Cable & Wireless • National Water Commission (NWC). :: FINANCIAL AVAILABILITY::   It is important that funding is available to carry out the operation of the proposed project. Investors may contact several financial institutions to obtain loans to ensure that they have adequate funding for their project. Suggested financial institutions include: Private Merchant Banks For example, Dehring, Bunting and Golding; Capital & Credit Merchant Bank Financial Institution Supervisory Division: www.boj.org.jm Public Merchant Banks: Development Bank of Jamaica Limited (DBJ) Jamaica Mortgage Bank Export Import Bank (EXIM Bank) Pan Caribbean Financial Services Commercial Banks: For example, Bank of Nova Scotia; National Commercial Bank Jamaica Bankers Association: www.jba.org.jm :: PRIVATISATION ENTITIES ::   1. Ariguanabo hillside Lands Ariguanabo is situated at Angels, St. Catherine, and the hillside lands (known as Lot 7) measures approximately 147.75 hectares (360 acres). The lands consist of steep, flat, and slopes, some of which are suitable for housing development. The communities are Angels and Strathmore housing schemes. Adjoining lands were recently sold for housing development, and Ariguanabo’s textile factory and two large buildings have already been divested. 2. Bath fountain Hotel & Spa (Lease of Assets) National Monument and Protected Area. Thirty-two hectares of a 77- hectare (190.19 acres) property to be divested, including hotel building with 17 guest rooms, 10 public baths and three guest baths. Property belongs to the Bath Corporation. 3. Black River Upper Morass Development Company (BRUMDEC) Situated at Elim, St. Elizabeth, consists of approximately 2 024.3 hectares (5 000 acres) of land suitable for agricultural production. In the 1980s BRUMDEC produced rice; however, some sections of the property currently have sugar cane and cash crops. 4. BRUMDEC (NIBJ’s Land for sale) Situated at Barton Isle, St. Elizabeth, is a 10.13-hectare (25 acres) property formerly known as Cromarty Farm, for sale. 5. Caymanas Track Limited The Caymanas Park horseracing facility is owned by the Government of Jamaica through Caymanas Track Limited (CTL). CTL holds a licence issued by the Government for the promotion of horseracing at Caymanas Park the running of pari-mutuel pools and the operation of the racing pools. Approximately 1 000 on-track races are promoted annually. Local races take place on Wednesdays, Saturdays and public holidays. Caymanas Track is located on a 79.36-hectare (196-acres) property which is bounded to the east, west, and south by the Portmore housing community which has approximately 300 000 inhabitants. It is also near the Kingston Metropolitan Area which has over 800 000 inhabitants. Other major population centres such as Spanish Town, Old Harbour and May Pen also have easy access to Caymanas Park. The full implementation of Highway 2000 will reduce the time of the journey to Caymanas Park from the major centres of Ocho Rios and Montego Bay to 45 minutes and two hours respectively, providing a significant opportunity for the operator of Caymanas Park to target tourists as a new market segment. 6. Cotton Polyester Textile Company (Jamaica) Limited Situated at Rhoden Pen, Old Harbour, St. Catherine, this company was established in 1989 to manufacture cotton yarns, cotton grey goods and other textile products primarily for the export market. The factory complex is situated on approximately 9.72 hectares (24 acres) of land on an industrial estate developed in 1975. Cotton Polyester Limited is the registered proprietor of the land in fee simple. The factory complex comprises buildings totaling 211 590 sq. ft. including office space, warehouses and the textile plant with its supporting facilities. Approximately 10 acres of the land is also available for divestment. The divestment strategy is to dispose of all the machinery, equipment and other movable assets and renovate and sub-divide the buildings for lease to several investors to carry out manufacturing, warehousing, trading and other types of activities. The office building and four warehouses are currently available and will be advertised for divestment. 7. Jamaica Railway Corporation (Assets) 1 133 hectares (2 798.51 acres) inclusive of right of way. Main Line: Kingston to Montego Bay (181.45 km). Branch lines: Spanish Town to Linstead (25.35 km); Bog Walk to Port Antonio (87.30 km); May Pen to Frankfield (37.42 km). Approximately 8 464 sq. m. warehousing and 8 371 sq. m. central workshop facility, rolling stock, machinery, head office buildings and stations. 9. Longville Park (Lands) Lands measuring 427.13 hectares (1055 acres) situated Longville Pen, St. Catherine and Clarendon, contiguous to the Longville Housing Scheme, the former West Indies Pulp and Paper Factory and Bunting’s Fish Farm. The lands are suitable for housing development and some areas for agricultural plantation. 10. Solar Salt project Commercial production of solar salt based on pilot project from the Scientific Research Council. 11. Spring Plain Plain/St. Jago Property The Property, which is situated at Toll Gate, Clarendon, on the main road leading from Toll Gate to Milk River, is approximately 2.4 km (1.5 miles) away from the Mandeville – May Pen – Kingston highway. The property comprises a packaging house with office (70 000 sq. ft. on 4.3 acres), mango orchards 77.73 hectares (192 acres), and farm lands 151.42 hectares (374 acres). The Spring Plain property (the acreage now reduced) was developed in the 1980s to carry out large scale production involving a wide variety of short and medium term crops. 12. Sugar Cane Industry In November 2005, the Minister of Agriculture approved the privatisation of the assets of the Jamaican sugar industry, including land, distilleries, factories and Great Houses. The privatisation is to involve the assets of the following Government-owned sugar estates: • Monymusk, Clarendon • Frome, Westmoreland • Long Pond, Trelawny • Bernard Lodge, St. Catherine • Duckenfield, St. Thomas • Hampden, Trelawny For further information please go to www.sugarassetsjamaica.com or www.sugarcanejamaica.com. 13. Tarentum Industrial Estate Tarentum is situated adjacent to the main road between Free Town and Lionel Town, Clarendon, and rises to the Brazilleto mountain. The land comprises 253.85 hectares (627 acres). The Barge Dock and Welcome Beach at Salt River are 300 metres from this industrial estate. Top

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