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BOLT method can finance rapid rail
I must agree with the recent poll conducted by SBS which among other things indicated widespread dissatisfaction across wide cross-sections of the population on a range of matters including government’s handling of property tax, FATCA, CLF and, more recently, the Tobago ferry fiasco.
It is the first time that I have seen such chronic bungling, where everything went wrong but everyone did everything right because apparently no one is being held accountable, not the Minister, not the CEO, not the board of the Port Authority.
I must also concur with Dr Winford James that the recent poll should be a wake-up for the PNM and indeed for the PM who, according to the poll’s findings, saw his popularity rating fall nine percentage points from 51 per cent to 42 per cent and even located him as trailing the Leader of the Opposition in popularity.
It is not unusual, however, to see a new government’s popularity flag/wane some two years into office, especially given the spectre of low oil/gas prices and a revenue reduction of some $20 billion annually.
Given that there are some three years to run before the next general elections fall due there is still time to recover.
I wish to return, however, to the issue of traffic congestion on the roads especially at peak hours and its impact on productivity. Indeed, at the end of the day it is productivity which will drive the economy forward, increase national income and realise economic growth.
In addition, given the shortages in foreign exchange earnings, it will pay the government to postpone the import of non-essential and superfluous items in an effort to save the outflow of foreign exchange, while seeking ways and means of generating the inflow foreign exchange.
If the opportunity cost foregone of the highway to Toco and the building of a port there is the construction of the rapid rail to ease traffic congestion and increase productivity in the short to medium term, then, in my respectful view, the rapid rail is the best idea.
One must be cognisant, however, that investor confidence remains paramount for sustained economic recovery but given the strained revenue position at this time the rapid rail becomes too expensive.
There was much controversy over the Build Own Lease Transfer (BOLT) arrangement between the THA and a special purpose company in 2012 in the building of an admin office complex in Tobago which eventually ended in litigation in favour of the THA.
But when an entity is strapped for cash this becomes a strategic method of financing large projects, where the developer takes all the risk, the rents paid is capitalised to the end of the lease period towards the payoff of the property which will be fully owned by the lessee or party doing the leasing at the end of the lease period.
If the rapid rail could be built using this method of financing it means that this huge capital outlay could be deferred to a future date while enjoying the benefits of this most important project.
The BOLT method of financing has been successfully used to build the Ministry of Works head office in Port-of-Spain, the National Library, the UTC head office in Port-of-Spain and a myriad of projects world-wide including in Barbados, Grenada, Japan, China and even in Saudi Arabia.