TransJamaican Highway Limited (TJH) is moving to acquire Jamaican Infrastructure Operator (JIO), the French-owned company that manages and operates the East-West toll network on its behalf, to reduce its operating expenses.
TJH will pay US$16.1 million for all the shares in JIO.
The shares in JIO are held by Bouygues Travaux which has 49 per cent, and Vinci Concessions at 51 per cent. Bouygues and partners were initially the owners of TJH through which they held a 35-year concession to build and operate East-West Highway 2000, up to 2019 when they sold the operation to the Jamaican government.
The transaction, which was initially signalled in June this year, will see TJH “significantly reduce our cost,” TJH Managing Director Ivan Anderson, told Loop News.
TJH will save “approximately US$12 million per year,” Anderson said since JIO represents “more than 70 per cent of our total costs.
“We will continue to pay them. However, this will be less than half of what we pay them now,” Anderson said.
The cost reduction is expected to flow through TJH’s bottom line.
For the nine months up to September, TJH saw revenues of US$47 million but its operating expenses of US$29 million (the bulk of which is paid over to JIO) reduced its profit to US$4.1 million.
In a filing to the Jamaica Stock Exchange, TJH said it will pay the US$16.1 million Option Price “with funds currently in deposit in the Distribution Account.”