Narrative
Full Description
Project narrative
On February 3, 2010, the Export-Import Bank of China and the Government of Jamaica signed a $340,000,000 preferential buyer’s credit (PBC) agreement for the Jamaica Road Improvement & Rehabilitation Works Project, which is also known as the Jamaica Development Infrastructure Program (JDIP). According to internal records that Jamaica’s Ministry of Finance and the Public Service supplied to AidData in May 2020, the PBC carried the following borrowing terms: a maturity period of 15 years, grace period of 5 years, an interest rate of 3%, a commitment fee of 0.75%, and a management fee of 1.0%. The first scheduled date of loan repayment was January 21, 2016 and the final date of scheduled loan repayment was July 21, 2025. As of October 31, 2021, the loan had achieved a 100% disbursement rate ($340,000,000 out of $340,000,000). Its amount outstanding was $136,000,000 as of October 31, 2021. The Government of Jamaica designed the JDIP to repair and maintain the country’s road network, which had suffered extensive damage after a series of hurricanes and floods. The JDIP consisted of major transportation and road construction, including the expansion of a major highway from two to four lanes and repairs to the main and parochial road network. The JDIP also supported 5 major projects called Christiana Development Road, the Fern Gully Rehabilitation Works, the Rio Grande Bridge and the Cassia Park and Queensborough Bridges. The total cost of the Jamaica Development Infrastructure Program (JDIP) was $400 million. 85 percent of the total project cost was financed through the $340 million preferential buyer’s credit loan facility, which the Government of Jamaica’s Road Maintenance Fund (RMF) contracted with China Eximbank. The Jamaican Government committed to funding the remaining 15% of the project cost with revenue obtained from a special consumption tax on fuel. The Jamaican government agency responsible for project implementation oversight was the National Works Agency (NWA) and the Chinese firm responsible for project implementation was China Harbour Engineering Company Limited (CHEC). The project officially commenced on September 1, 2010. Then in 2011, the Office of Contractor General of Jamaica (OCG) raised concerns about the selection of CHEC as the project contractor. It began an investigation in July 2011, and after a thorough OCG examination of the JDIP loan agreements, and a sworn statement to the OCG from the Portfolio Permanent Secretary, OCG failed to corroborate public statements that had been made by the then-Transport and Works Minister, Mike Henry, that it was the China Eximbank that had imposed the selection of CHEC upon the Jamaican Government. Then, in 2012, the China Eximbank-financed Jamaica Development Infrastructure Program (JDIP) was subjected to a forensic audit by an internationally renowned firm that specializes in investigations of fraud, abuse, and corruption (Kroll Associates Inc., or "Kroll"). This audit (accessible via https://www.dropbox.com/s/3765fc4wpusrosi/JDIP%20Forensic%20Audit.pdf?dl=0) provides a rare glimpse of how domestic political pressures can influence site selection decisions in development projects financed by the Chinese government. Technical experts at the NWA—the government agency responsible for project implementation oversight—initially identified 19 potential projects for JDIP funding “based on road condition surveys, socio-economic factors, population density, access to essential services and agricultural interest.'' However, “tremendous influence was exerted from Members of Parliament, Parish Councils, Municipal Councils, and others." Kroll refers to these political actors as “stakeholders” in its audit of the project and notes that they “collectively considered JDIP as a facility to improve roads in the respective [geographical] areas.' Consequently, within four months of the signing of the China Eximbank loan agreement, “the 19 infrastructure projects [originally identified by the NWA] expanded into a [master] list of more than 1,000 potential projects. The project was completed in October 2013.