Lester Michael Henry Minister of Transport and Mining Government

March 2017 · Jamaica

Minister of Transport and Mining Government of Jamaica

Interview with the Honourable Lester Michael Henry

Prisma Reports (PR): The Government is making great efforts to enhance the ease of doing business and have a more conducive environment and has undertaken a series of pro-investment policy reforms intended to improve Jamaica’s investment climate, that already showed an improvement in the World Bank’s Doing Business Index. How would you describe today’s investment environment?

Lester Michael Henry (LMH): Today’s investment climate in Jamaica is right with all the opportunities that exist. It’s a matter of delivery time, a matter of implementation. From the concept of the Ministry of Transport and Mining we have already finalised the redevelopment of the Alpart (Alumina Partners of Jamaica) Plant, which was closed for some years, and that is functioning now. In my recent visits overseas I have seen interest in investing and in the subsequent opportunities. I have commitment from the Chinese Development Bank to invest in programmes of the Ministry of Transport and Mining. The Jiuquan Iron and Steel Company (JISCO) is the one that relates to the Alpart Mine, this is a circular park development. There is great interest in the Economic Zones, and in how they can be tied into a developmental plan, that relates to a multimodal plan in road, rail, sea and air transport. We have signed an MoU with Herzog International, which is one of the leading railway companies in the U.S. They have a 6-month timeline to come up with a restoration plan, for three phases of the restoration of the railway. Those are some of the plans that are being actively pursued. We have another number of offers related to the aerotropolis development of Vernamfield. As you know, TIME Magazine said that the aerotropolis concept is the best business idea to have come along. So I am seeing an increasing interest in it. The investment climate is right and people are realising that. I just came back from the Geneva Conference, and in terms of internal transport, I found that many people are now using the integrated multimodal transport system. The Doing Business Index is improving and the investment environment is full with a lot of opportunities.

PR: The Government is undertaking great efforts to enhance the ease of doing business and has undertaken a series of pro-investment policy reforms intended to improve Jamaica’s investment climate, which already showed an improvement in the World Bank’s Doing Business Index. How would you describe today’s investment environment?

LMH: That is what the aerotropolis is all about. I would even go further and say Jamaica should not be the centre of the Caribbean, but of the world. Thanks to our geographic location we could move goods and services 2 to 4 days earlier than anybody else in the globe.

PR: What are the challenges you are facing?

LMH: The challenges we face are to overcome the issues that relate to procurement and investment. We have to move as quickly as possible. The multimodal transport system is the second oldest railway in the world. It connects all the ports and could be improved. It is the railway that was used with the ports to develop the sugar and banana industries, built by Europe.

PR: Stakeholders in the transport sector have welcomed the consultative approach you brought to the transport portfolio since taking office. How smooth is the dialogue between the public sector, the private sector and the civil community?

LMH: I think it is important to appreciate the potential impact of social issues. I am therefore using the most cooperative effort and integrated approach. I implement programmes in the transport sector by consultation with various stakeholders.

PR: The National Transport Policy envisages deeper private sector participation as a key priority. How are you promoting partnerships and enhancing the role of the private sector?

LMH: We do this through constant consultation with the private sector. And by beginning to recognise that the transport sector has its own industrial involvement in day-to-day life. With the support of the private sector, we would have a whole raft of things to develop, such as starting to economize and create the medallion concept for passenger routes for the private sector, so that they don’t have to look at subsidized areas of movement, but by their own developmental plan. We are discussing this across the board with private sector companies.

PR: The Principal Director in the Ministry, Dr. Oral Rainford said, “the minerals sector is heading in the right direction and is experiencing buoyancy”, as natural resources have been identified as another priority sector. What are the plans to increase revenue from mining, maximising the value-added areas, and to integrate the sector into other areas of the economy?

LMH: Some of the existing partnerships that we are developing in the mining industry are tied to what we inherited, with the various mines that were not operating. For instance, Noranda Bauxite (now New Day Aluminum (Jamaica) Ltd.), which is 49% equity owned by New Day Aluminum LCC, and the Government of Jamaica, which owns 51% through Jamaica Bauxite Mining Ltd., has now been transformed into a new approach on how we enhance the exports and the revenues to be earned by the country. Therefore, we are expecting this to manifest itself as we apportion the areas of mining resources that are still available in the country – 60 years of reserves. The LME (London Metal Exchange) value of bauxite is rising quite dramatically. After 60 years of mining over 1.6bn tons of high quality bauxite remains available. The skills, knowledge and experience gained from the bauxite industry will facilitate the creation of a new mining industry, including limestone, as we don’t want it to be tied only to bauxite. We are looking very much into driving the new areas to increase revenue; we want to transform the mineral sector from a predominant mono-mineral sector to one with several distinct developed mineral industries. With regards to limestone for instance: we have one of the best limestone for the whole beauty industry. So, if you look at the aerotropolis development of Vernamfield, we have the Milk River Bath in that area. Therefore, if you connect that to an Economic Zone that could be developed around limestone and around the whole concept of mineral baths, etc. then you can appreciate an economic zone for the beauty industry, for instance. We want to add value to what we have. We are looking at metallic minerals other than bauxite, i.e. gold, silver or copper are the primary precious and base metals that are being explored now in Jamaica, and they represent for me an underdeveloped segment of Jamaica’s mineral sector. Therefore the rare earth elements are part of what we are doing. We are also investing heavily in R&D in the mineral sector.

PR: How is the Ministry promoting sustainable management of Jamaica’s natural resources?

LMH: We are very sensitive and reactive to the environment and climate change. We are developing an emission’s policy that is going to relate to the whole use of energy and its effects on the climate. As a country that is dependent on the tourism sector, and a signatory of the Paris Agreement, we are aware that we have to modernise our practices. In the next 90 days, as part of a tripartite ministry group, we are looking to re-write our national emissions policy to cover the transport sector – from planes to shipping – as this is going to have a major impact on the country.

PR: During the meeting with members of the diplomatic corps you said you are open and ready to do business with those who are looking for investments that can become game changing. What opportunities for direct investment and/or public-private partnerships would you like to convey to Foreign Policy’s readers and the international community?

LMH: That all relies on the PPP structure – which is the driving force of the economic development of the country. We are the closest island state to the Panama Canal exit. Ships traversing the area pass in close proximity. The portfolio of bilateral air services – I am pursuing a policy of open skies – this is facilitating regional trade, particularly in Central and South America. All of this combines to give Jamaica the potential of becoming the logistics hub of the Western Hemisphere. This will be done through PPPs, particularly through the Special Economic Zones (SEZ) that the Government is now activating. We welcome people from other countries to take advantage of these zones for the movement of goods and services. We are under four hours from New York City, for example. Add another four hours and your goods can be in Paris or London. The issue of the logistics node is very important. Vernamfield is within 10 hours flying time of over 1.6bn consumers in major developed and emerging economies. When you look at the impact that could have on the agricultural and fishing sectors, the upsides are huge. Therefore, we want to invite other countries to take advantage of this positioning.

PR: Amongst the first things anyone who wants to invest in a foreign country asks is infrastructure. What confidence message do you want to send to the international community?

LMH: I would say that you have a stable government, a stable political transition. This is evidenced by the support from one government to the next for existing and planned projects. At the same time, we are aware of the socio-economic issues that need to be addressed – particularly at the lower end of the economic scale and the problems relating to crime and violence. That said, we are a very safe country with regards to the protection of your investment and of the safety and personal welfare of investors and their staff. To boost investment, we need to address the areas where we come up short. For example, boosting multilingual training. That said, the world’s business language is still English. That is the base of our communications. In terms of safety, we are also aware of the measures that need to be implemented to allow for the safe passage of people and goods through the future logistics hub.

PR: What does it mean to Jamaica to return to the IMO Council?

LMH: The Caribbean Maritime Institute, now the Caribbean Maritime University – the first in the region, has shown where we can perform, and what we have already achieved. We already have over 4,000 students and the graduating classes placed globally into permanent jobs at a rate of 98%. Furthermore, I was very proud to visit China a few weeks ago, to offer 10 scholarships to the Chinese Government at the University across a wide area of disciplines. Right now, we are installing the Festo FACT Project – this is a new project to boost the teaching of Mechatronics. This is cutting edge technology that is being further developed here in Jamaica. We are very proud of the steps in this direction. We are proud to say that through the University, we are not just serving the Caribbean, but the world and we will be boosting student numbers to between 7-8,000 students.

We are on the right track. If we return to the aerotropolis idea, we are looking at the development of a health port, a logistics port, an education port, a commercial district, manufacturing park and an entertainment port. All of these are the areas that will be developed around the airfield, and by extension will encourage more businesses to capitalise on these facilities. When we are finished with the aerotropolis, we will be able to handle the world’s largest cargo plane – the Antanov 124. This will ensure the ability to handle the movement of all forms of cargo and services. If you look at this in terms of the economic benefit – focused on MRO and cargo services – we are looking at a boost of US $121 in GDP as a return on every single dollar invested. A US $2bn investment will create 30,000 direct employment opportunities in Jamaica. The cabinet has already given its support and approval to being this project.

PR: The most Hon. Prime Minister Holness expressed, during a talk with U.S. Vice-president Pence, optimism about the future and confirmed Jamaica’s continued interest in building stronger ties with the United States and enhancing current partnerships. The partnership with Herzog International in the rail system or the co-operation agreement with Atlanta Airport are two recent examples. What is your overview on the diplomatic and commercial relations of both nations?

LMH: My view is one of optimism. The relationship is a good one. We have to recognise that the Jamaican economy goes where the American economy goes. That said, having just signed with Herzog Int. to redevelop the railway speaks of the continuity, depth and growth of the existing relationship that we have. Our base offers different areas for investment. Part of the idea of the SEZs is to offer added value services and materials to base elements. As a result, I expect to see more R&D based in Jamaica with US partners. I believe that we will continue to have a good relationship and that companies, and countries, that previously went elsewhere, will now look to Jamaica in order to position themselves closer to work with the US.

PR: You are the longest serving Member of Parliament in the House of Representatives in Jamaica and were former Minister of State for Culture, Tourism and Information. Peter Ferdinand Drucker said “the best way to predict the future is to create it.” What is the future you want to create for Jamaica?

LMH: I think that if you look to the future, transport drives social interconnectivity, which is critical to human inter-relations. When we removed the railway from the lives of the people, we removed the concept of time and travel for everyday people. We hadn’t built the roads to accommodate all the bus travel that would have given people a choice. We are facing this with the growth of smart cities today. If we can capitalize on getting goods and services to the destination markets on time, it will make the Jamaican economy grow. My vision, therefore, is to see Vernamfield fully developed. Right now, you could run the railway from Kingston to Vernamfield with only a few kilometres of extension work. If you integrate this with the various areas around the airfield, it will improve the lives of everyone.