Toll road operator part of pilot with Bank of Jamaica to assess use of Central Bank Digital Currency

TransJamaican Highway (TJH), operator of the East-West Wing of Highway 2000, plans to implement the use of credit cards, debit cards and E-Wallet digital currency at its toll booths starting in October next year.

This is being done as part of the development of phase 1C of the toll road, which would extend from May Pen, Clarendon into Mandeville, Manchester. This project would add a further 28km, thereby adding more than 50 per cent to the existing East-West highway, which currently runs from Kingston into May Pen via Portmore, Spanish Town and Bushy Park, St Catherine interchanges.

TJH is now analysing the use of credit and debit cards to be implemented as part of Phase 1C and a payment mechanism at its “Tag Only” plazas. The use of E-Wallet Digital currency is also being considered, as TJH is a part of the pilot with the Bank of Jamaica to assess the use of digital currency through the Central Bank’s Digital Currency (CBDC).

The company is banking on increasing its T-tag usage so that over 80 per cent of users utilise this pre-payment means over the next four years. It was disclosed at the company’s annual general meeting yesterday that, towards the end of this month, the toll road operator plans to submit its final proposal to own and operate Phase 1C of the highway development.

New leg of highway to bring in millions in incremental revenues

It has been estimates that during the first-year of operating phase 1C, revenues are expected to be approximately US$7 million with completion of the new leg of the highway estimated for October 2022. TJH management also outlined a number of development projects that are now being executed.

These include the construction of a second gas station at the Portmore toll plaza with Total. The management expressed optimism that with the easing of restrictions announced on June 22 to take effect in July, traffic along the highway will improve.

The management noted that the various restrictions imposed by governments to contain the spread of COVID-19 are still weighing on travel and therefore on the level of traffic observed on most road networks across the globe. Despite the lockdowns, TJH continues to see the recovery of the traffic.

This last December quarter saw a return to profit in the amount of US$0.6 million compared to a net loss of US$1.5 million in the same period last year. At present, the continued postponement of the start of the school year and the use of distance learning continues to weigh on the current level of traffic, as does the maintenance of the curfew and the ban on large gatherings.

2020 financials were impacted adversely by COVID-19

TJH ended 2020 with a 15 per cent decline in revenue to US$45.38 million relative to US$53.29 million in the corresponding period last year. Revenue for the fourth quarter in December 2020 amounted to US$12.75 million (2019: US$14.02 million), representing a nine per cent decrease.

The company reported a net loss of US$1.87 million, relative to a profit of US$8.30 million booked for the corresponding period in 2019. According to TJH Chairman Charles Paradis, starting from TJH’s first full year of operation in 2004, up until 2019, the traffic on the highway has grown by an average of 12 per cent per annum.

However, this track record of growth was temporarily interrupted last year by the pandemic and the list of safety measures associated with it has weighed on the movement of people, resulting in a drop in the number of transactions on the highway.

“At the worst of the pandemic in April 2020, the downturn in traffic was 52 er cent; however, the decrease in traffic moderated over the year, by December 2020 the traffic for the full year was down by only 14.8 per cent,” Paradis added.

He explained that, “as we look into the future, we continue to be focused on the new opportunities which are being presented to us, i.e., owning and operating the future section of Highway 2000 East West, the Phase 1C which is currently under construction, also the addition of new access onto the highway”.