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The Politics of Infrastructural Projects: A Case forEvidence-Based PolicymakingSandria Tennant a & Anthony Clayton ba Sir Arthur Lewis Institute of Social and Economic Studies , University of the West Indies ,Kingston, Jamaicab Institute for Sustainable Development , University of the West Indies , Kingston, JamaicaPublished online: 15 Mar 2010.

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The Politics of Infrastructural Projects: A Case for Evidence-Based Policymaking

Politics of Infrastructural projects Sandria TennantSir Arthur Lewis Institute of Social and Economic Studies, University of the

West Indies, Kingston, Jamaica

Anthony ClaytonInstitute for Sustainable Development, University of the West Indies, Kingston, Jamaica

Many developing countries currently face tightening fiscal constraints as a result of the globalfinancial crisis and associated reduction in both credit and demand. Policymarkers thereforehave less fiscal space within which to undertake projects, so the opportunity cost of any mis-allocation of resources will be correspondingly higher. There is therefore an increasing needto rely more on evidence-based policymaking (EBPM). The is particularly so for large infra-structural projects, as these tend to be costly, and especially for transportation projects asthese are particularly prone to result in sub-optimal outcomes. This paper examines the policyprocess for the implementation of the Jamaican Highway 2000, one of the largest and mostcostly infrastructure projects in Jamaica in recent years. A number of primary and secondarydata sources were explored to ascertain the extent to which the decision to implement theproject reflects a case for evidence-based decision-making in practice. This made it clear thatthe decision was taken at least partly on political grounds, largely in the absence of any sup-portive evidence, and on the basis of over-optimistic and unrealistic assumptions, and that thishas created a number of serious, long-term challenges for Jamaica.

Keywords: evidence-based policy making, transportation, infrastructure, policy process,policy advice

INTRODUCTION

As many developing countries face tightening fiscal con-straints, the laxity within which policymakers are able toundertake projects that result in the misallocation of scarceresources or sub-optimal outcomes has been significantlylessened. As such, there is an increasing need to rely more onevidence-based policymaking (EBPM). EBPM entails sys-tematic, rigorous methods and rational analyses. Plewis (2000)notes that evidence-based policy-making requires “. . . thatpolicy initiatives are supported by researched evidence andthat policies introduced on a trial basis are evaluated in asrigorous a way as possible.”1 This approach includes theapplication of policy analysis to facilitate the selection of

the best options, and the utilization of specialist knowledgeto enhance the decision-making process.

The ultimate aim is to improve the likelihood of successand to ensure that policy interventions yield optimumresults with the use of reliable, timely information. The roleof EBPM in policy-making is to increase the effectivenessof government, reduce resource wastage and lead to bettervalue for money. Sutcliffe and Court (2005) highlight thatgovernments in developing countries, even though theytypically have less experience in using such approaches,stand to benefit significantly as the “better utilization of evi-dence in policy and practice can help to save lives, reducepoverty, and improve development performance.”

The quality of policy advice, particularly, plays a criticalrole in this more rigorous and precise approach to policy-making. Weller and Stevens (1998) emphasize the importanceof the quality of policy advice provided to public officialsfor decision-making in determining whether public initiativesare successful or result in disasters. Shepherd (1979) notes

1As quoted by Sanderson (2006).Correspondence should be addressed to Sandria Tennant, University of

the West Indies, Sir Arthur Lewis Institute of Social and Economic Studies,Mona, Kingston 7, Jamaica. E-mail: sandria.tennant@gmail.com

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POLITICS OF INFRASTRUCTURAL PROJECTS 183

that the political and policy processes of a country play a keyrole in the decisions to invest in and the nature of public sectorprojects in a number of ways. One involves the decision-making processes and the quality of the policy advice providedto policy-makers. Parsons (1999) notes that decision analysisinvolves understanding “the way in which facts and valuesinteract, and the way in which beliefs, ideas, interests on onehand, interplay with information, facts, reality and vice versa.”

An important aspect of decision analysis lies in under-standing the context within which decisions are made andthe nature of the policy advice that feeds into the decision-making process. Weller and Stevens (1998) argue that “policyadvice is a crucial determinant in the public sector activity”;and that well informed and researched policy advice iscrucial to a project’s success, as appropriate professionalexpertise is needed in the assessment of the risks and costsassociated with a particular policy area. Where soundadvice is not the basis of public decisions then “policydisasters and mistakes” are more likely.2

The quality of policy advice, however, depends onprocedures to ensure that the advice and the evidence onwhich it is based are reliable. Francesco (1999) discussedthe need to evaluate whether consultancies actually result insuccessful outcomes. The more general need, however, isfor a more a systematic approach to ascertaining whetherfinal outputs produced by both consultants and publicadministrators are actually rational, rigorous and imple-mentable. This is increasingly important as the sources ofinformation that governments use as basis of their decisionshave widened to include input from public administratorsand officers, local and foreign consultants, NGOs, donorand multilateral agencies, among others. Governments needto be able to determine, prior to implementation, whatadvice is good, relevant and reliable, and which is not.

The Government of New Zealand has devised a perfor-mance management framework for measuring the quality ofpolicy advice. This framework involves the assessment ofsuch advice in seven areas: purpose; logic; accuracy; options;consultation; practicality; and presentation of information(Weller and Stevens, 1998). This framework provides anexcellent basis on which governments can assess the substanceof the advice provided to them at the start of the policy pro-cess, which should result in greater consistency in the selectionand implementation of successful public sector projects.

Policymaking for infrastructure frequently fails to followthis kind of clear and rational approach. There are a numberof factors that influence the decision to proceed with theimplementation of such projects. Kemmerling and Stephan

(2001) note that in practice the decisions to invest in infra-structure are often based on “pork-barrel infrastructure poli-cies due to the influence of firms on the allocation of theinvestment.” They note that the potential influence on the allo-cation of infrastructure investments by those with politicalaffiliations and connections may contribute to sub-optimalresults in terms of how resources are allocated and the extentof social welfare that is achieved. All too often, the decision toinvest in infrastructure is determined, at least in part, by thelobbying efforts of businessmen who have commercial inter-ests in the creation and maintenance of infrastructure in a par-ticular area. The influence that firms have on the size andlocation of infrastructure development can be so substantial,that infrastructure which is normally treated as a fixed capitalinput to the production process, sometimes now has to beviewed as a variable input in the long run due to pressure fromsuch private interests (Kemmerling and Stephan, 2001).

The potential influence of such private interests on theprovision of infrastructure is compounded by the fact that inmany instances political gain and ideological reasoning ratherthan economics and practicality may be the controlling factorin shaping a nation’s infrastructure, and transportation devel-opment is particularly prone to this effect (Hoyles, 1973).Politicians wanting to secure votes and campaign funds oftenbecome sensitive to lobbying efforts. In this respect Gauthier(1970) notes that transport investments are always “politi-cally safe”, because it is difficult to prove them wrong untilconstruction has begun, and because they are never normallyobvious failures. Heinz (2002), however, highlights thedanger of this approach. He points out that when govern-ments do not curb the behaviour of political actors then otherinvestors will become less willing to be involved, thus, infra-structure investment will fall leading to sub optimal levels ofinfrastructure in the particular country or area.

It is therefore important that governments act in a non-partisan and responsible manner in order to create a policyenvironment that will encourage investors to becomeinvolved in infrastructure provision. Even more importanthowever, is for governments to utilize EBPM in the formu-lation and implementation of transportation policies. This isbecause even though investments in transportation are notnormally obvious failures, transportation projects actuallyhave a higher risk of resulting in a misallocation of resourcesbecause of their particular combination of high cost, lumpiness,longevity, long-term amortisation and the externalities asso-ciated with their implementation of projects (Gauthier,1970).

This article seeks to add to the discussion of the politicaleconomy of infrastructure development by examining thedecision-making process as it relates to the formulation andimplementation of a transportation infrastructural project ina low to middle-income developing country—The JamaicanHighway 2000. The article highlights a number of politicalissues that impacted the outcome of the project, includingthe lack of rigor and systematic approach used in makingthe decision to proceed with the project. The remaining

2Dunleavy (1995) defines policy disasters as ‘generally construed tomean significant and substantially costly failures of commission or omis-sion by government . . . namely that the mistakes made are eminently fore-seeable—but decision-markers systematically choose to ignore anabundance of critical or warning voices in order to persevere with theirchosen policy.’

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subsections of the article will proceed as follows: section 2provides a brief background to the Jamaican Highway 2000project and the social and economic context within whichthe project was formulated and implemented; section 3briefly highlights the methodological approach to the study;section 4 discusses the political issues concerning the High-way 2000 project; and section 5 concludes and distils les-sons for governments in developing countries as they seekto implement transportation infrastructural projects fordevelopment.

THE JAMAICAN BACKGROUND AND HIGHWAY 2000

The economic history of Jamaica has had a significantimpact on the current structure and performance of theeconomy. After various unsuccessful and costly experi-ments with alternative systems, the country now operates asa mixed economy comprised of private sector enterprisesand state owned institutions. In early 2009, the major sec-tors of the economy were Tourism, Bauxite Mining, andAgriculture, in that order, with Remittances having recentlybecome the largest source of foreign exchange, althoughthis is currently in flux due to the financial crisis. The heavyreliance on a small number of sectors leaves the economyvery susceptible to shocks in the internal and external envi-ronment (World Bank, 2003). In 2007, the percentage con-tribution of Tourism, Agriculture, Manufacturing andMining to GDP was 10 percent,3 5.3 percent, 12.6 percent,and approximately 5.5 percent, respectively.4

The Jamaican economy has consistently achieved low tonegative growth rates over the last four decades, with anaverage annual growth rate of 1 percent per year since1974,5 and negative rates during the period 1996–2001(World Bank Report, 2003). Though the average annualgrowth rate improved within the period 2002–2007, it con-tinues to be marginal, with the largest growth of 2.5 percentbeing experienced in 2006. The World Bank highlights theapparent paradox of the under-performance of the Jamaicaneconomy, given the country’s rich endowments of naturalresources and high average annual gross fixed capital for-mation of 28–30 percent of nominal GDP over the lastdecade, (a level which places Jamaica in the top quartile ofcountries). This mediocre performance, the World Bank(2003) asserts, is attributable partly to the financial sectorcrisis experienced in the mid to late 1990s; but also as aresult of the underutilization of much of the country’s capitalstock created in the 1990s.

The Bank (2003) highlights that in some cases theincreases in capital investment were not justified by profitpotential that would result in economic growth. It furtherargues that capital stock created during this period waspredominantly expected to support the development ofexport zones and the construction of housing, but the usageof many of these industrial zones to date is low largelyowing to the country’s poor price competitiveness, com-paratively high real exchange and wage rates, and highcrime levels.6

This under-utilization of resources may also be related topersistent challenges facing the Jamaican economy: the ten-dency to import far more than is exported, and the burden ofdebt serving required to fill the foreign exchange gap andregular, large and increasing fiscal deficits. The country’sfiscal deficit grew over the period 2001–2007, and as at2007 the deficit was J$40.3 billion. It is therefore not sur-prising that Jamaica has one of the highest debt to GDPratios in the world, which reached 125.1 percent in 2007.The cost of servicing this growing debt has placed severebudgetary constraints on the government, affecting, particu-larly its ability to undertake capital projects. This under-scores the importance for government expenditures andefforts to be allocated efficiently, that is, to areas of theeconomy that will improve economic performance, andgenerate employment opportunities.

Social conditions in Jamaican have often mirrored theperformance of the economy. The country faces serioussocial challenges, one being the highly skewed distributionof wealth and opportunities across the society. The share ofconsumption by the top 20 percent of the population, in2007, was approximately 10 times greater than the bottomquintile (Human Development Report, 2007). Poverty levelshave, however, decreased from 16 percent in 19987 toapproximately 10 percent in 2007. Despite this positivetrend, the rural-urban inequality persists, with the incidenceof poverty in rural areas (19.8 percent) being far higher thanthose in the Kingston and St. Andrew metropolitan areas(9.4 percent) and other towns (9.2 percent).

The persistent social and economic problems facing thecountry have been compounded by the emergence of a“clientelistic” political system,8 and an unmanageable crimerate. In spite of some positive trends, the country clearlyfaces a generally deteriorating economic and financial situa-tion. Such conditions may worsen in the wake of the currentglobal financial crisis, and possible global recession. It istherefore imperative that the country’s very scarce resourcesare expended to provide the best value for money, and yieldthe optimal benefit for the majority.

3http://havanajournal.com/travel/entry/bahamas-jamaica-and-caymanas-tourism-may-suffer-after-end-of-us-cuba-embargo/

4Economic and Social Survey Jamaica (2007).5National Industrial Policy: A Strategic Plan for Growth and Develop-

ment, April 25, 1996.

6World Bank (2003).7Danielson (2004).8Stone (1994), a clientelistic system is one whereby ‘party leaders

catered to the needs of hard core party supporters through state patronage(jobs, contracts, benefits, favours, houses etc.)’.

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POLITICS OF INFRASTRUCTURAL PROJECTS 185

Transportation Issues and the Jamaican Highway 2000

Transportation, specifically road development, has consumedsignificant proportions of the Jamaican capital budget fordecades. In the 1994 World Development Report (WorldBank) on infrastructure and development, Jamaica is shownto have a road density of 1,881km per million persons,which is the second highest road density network in theworld. Up to the early 1990s, Jamaica was being featuredinternationally for its multibillion dollar investment in itstransportation network. It is, however, also noted that only10 percent of the road network was considered in a goodcondition, which reflects chronic problems with poor main-tenance, in part due to the practice of assigning maintenancecontracts to politically-favoured contractors. This percentageplaces Jamaica at one of the lowest positions in the list ofcountries in the 1993 World Development Report. Revisionsin 1998 had only 13 percent of roads in Jamaica being in agood condition.9

The poor quality of transportation networks is an importantissue, because as transportation holds a strategic place in devel-opment planning in Jamaica, as internal travel for productivemeans and pleasure are predominantly facilitated by motorizedmodes of transport (such as buses, cars, trucks and trailers).The majority of the population travels by public transportation,while the dominant mode of travel for the wealthiest is privatemotor vehicles (54.1 percent).10 Traveling to school for chil-dren is predominantly done by public transportation (59.6 per-cent), followed by 32.4 percent who walk, and a small 7.1percent who travel via private motor vehicle.

These statistics suggest that in order to facilitateimproved travel experiences for the majority of people inJamaica, transportation investment must facilitate publictransportation accessibility and mobility. Jamaica thereforeembarked on the construction of a restricted access tolledhighway, which was named the Highway 2000 project.Highway 2000 was one of several projects conceptualizedby the government to place the country along a path oftransformative socio-economic development. The PlanningInstitute of Jamaica (2004) noted that the highway is “predi-cated on the notion that infrastructure development, particu-larly road construction, will act as a major catalyst foreconomic growth, particularly in areas that did not previouslyhave access before.”11

The project was estimated to cost US$850 million andthe first phase was constructed and funded through a public-private partnership under the Build Own Operate and Transfer

(BOOT) model. This partnership will last for 35 years.This approach to financing the project was expected toallow the country to enjoy the benefits of the highwaywithout having to immediately find the finance for thetotal set up and construction costs. The costs of construc-tion and maintenance, as well as the provision of a returnon the investment, are to be financed over the 35-yearperiod through the collection of tolls. As with most public-private partnerships, the financing and risk-sharingarrangements associated with the project were organizedthrough a series of complex arrangements between thegovernment, the concessionaire of foreign and local con-tractors, and investors.

However, increasingly, concerns have been voicedregarding the disparity between projected benefits of theproject and its outcomes. These concerns include:

1. the under usage of the highway, with current demandfor the roadway falling significantly below the pro-jected demand, particularly for the first phase of theroadway;

2. the exorbitant costs associated with using the highway,which are currently too high for the average Jamaicanhouseholder to afford;

3. the misinformation provided by the government to thepublic that the project is a private initiative when,under the financial arrangement, the government andby extension taxpayers have to bear a significant portionof the financial risks; and

4. legal clauses itemized in the Highway 2000 arrangementbetween the private contractors and the government,which will make more costly for future governmentsto improve public transportation networks that may beconstrued as being in direct competition with the tollroad.

This article is not seeking to make an assessment as towhether the highway in its entirety is a policy disaster, inthat the project will not result in the hoped-for improvementin economic and social conditions in the country, as it is stilltoo early to come to this conclusion. Rather, the articleexplores several political issues in the decisions that weremade to proceed with the implementation of the project,which can be clearly classed as policy mistakes, were notevidence-based, and which may reduce the possibility of asuccessful outcome for the highway project.

METHODOLOGY

The assessment of the politics surrounding the decision toproceed with the implementation of the Jamaican Highway2000 project and how they influenced some of the unintendedoutcomes of the project was conducted using secondary datacollected from a number of sources including ministry

9Figures accessed from the National Road Constructing and Operating(NROCC) http://www.mtw.gov.jm/whti/presentations/h2k_nrocc.pdf

10Jamaica Survey of Living Condition (2006): A Joint Publication ofthe Planning Institute of Jamaica and the Statistical Institute of Jamaica.

11Preliminary Draft, ‘Portmore to Clarendon Park - Highway 200Development Plan 2004–2025’. Planning Institute of Jamaica, September20, 2004.

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papers,12 and articles and reports from public institutions andthe country’s two leading daily newspapers. Elite interviewswere also conducted with six key public and private stake-holders to the process to assess their perspectives and expec-tations of the project, and to provide a deeper understandingof the politics and planning behind the Highway 2000 project.

HIGHWAY 2000 — IMPORTANT POLITICAL ISSUES

Practicality of the Decision to Implement the Highway 2000 project

The idea to construct a trans-Jamaican highway was firstadvanced during the 1960s and put forth again in the 1970s.Its overarching objective was to link the major economiccentres in Jamaica, thus facilitating and sustaining growthand development of industrialized metropoles. Upon imple-mentation in 2000, the central objective remained the same,that is, to link key urban centres—Spanish Town, MontegoBay and Ocho Rios—to Kingston.

The Permanent Secretary in the Ministry of Transportand Works noted that the idea was to ensure that no twopoints across the island would be more than 1½ hours fromeach other. Similarly, the previous Minister of Finance andPlanning explained that the government took the deliberatedecision to improve the country’s infrastructure because ofthe extended time it took tourists to travel from MontegoBay to the metropoles of Kingston and St. Andrew.

Several issues were explored in the effort to ascertain thereasoning behind the Highway 2000 project. The assessmentbegan by comparing the level of road capitalization inJamaica with that of other developing and developed countries.As seen in Table 1, Jamaica up to 1988 had a paved roadnetwork per million persons of 1,881km. This figure ismore than twice that of larger and more developed countriessuch as Brazil, Argentina and Mexico. The figures alsoshow that the country is experiencing difficulties in repairingthis extensive road network, as the country had the lowestpercentage of roads in good condition.

An interesting trend is also identified in Table 2, whereall other countries have a very large ratio of vehicles to kilo-metres of roads per million persons with, for example, theUK having a ratio of 3.4 to 1; 6.8 to 1 for Japan; 11.5 to 1for Brazil; and 13.4 to 1 for the United States. Jamaica, instark contrast, has a ratio of vehicles to kilometres of roadper million persons of approximately zero.

The disparity between Jamaica’s extensive road networkand the number of motor vehicles in the country has beenhighlighted by numerous consultants to the government

since the early 1980s. In spite of this, the predisposition toinvest in transportation networks continued into the newmillennium with the construction of two additional grandhighway projects, Highway 2000 and the North Coast High-way. The Permanent Secretary in the Ministry of Transportand Works notes that the Ministry, recognizing the length ofthe country’s road network, has for years not engaged inroad construction, but rather has been undertaking expenditurein the area of improvements to traffic conditions. He alsonotes that the Ministry is experiencing difficulties withmaintaining the existing network, to the extent that theyhave now embarked on a program of retiring those roadsthat are least economical. Notwithstanding this, Highway2000 and the North Coast Highway were approved.

This raised important questions as to the justification forconstructing the Highway, particularly at such a grand scale,given the low traffic intensity. The Permanent Secretary wasalso asked whether the (currently low) level of traffic flowon the highway would provide sufficient funds to cover thecost of construction. He explained that the contract with theprivate partners for the construction of the highway wasundertaken for a period of 35 years, and that projections forthe future usage, by advisors to the government, indicatedthat traffic growth in the island would have been sufficientto meet the cost of constructing the highway. He noted,however, that it had become clear that these projectionswere too high and because of shortfalls in demand for andusage of the highway, the completion of the entire Highwayproject is not now financially feasible.

This conclusion was confirmed by the consultant tothe National Road Operating and Construction Company(NROCC), who indicated that a four-lane highway is expectedto support a traffic volume of 30,000 to 40,000 cars daily,which is far above the current daily average usage of thehighway, which at peak days is approximately 13,000 cars.

12Steps were taken to acquire cabinet submissions on the Highway2000 project. Under the access information act, however, such documentsare not accessible to the public until 30 years after the date of submission.

TABLE 1 Comparative Country Analysis of Level of Road Capitalization

CountryRoad Network/Paved Roads per km per million persons (1988)

Good Road Condition

(1988)

Jamaica 1,881 10%Trinidad & Tobago 1,724 72% * 1999Argentina 858 35%Costa Rica 1,059 22%Mexico 820 85%Brazil 704 30%India 893 20% *2000Japan 6,007 85%USA 14,172 85%UK 6,174 85%

Source: United Nations. Statistical Yearbook, 48th ed. (2004). NewYork: United Nations, p. 531.

World Bank: Infrastructure for Development, Table 32. In World Devel-opment Report. (1994). Washington, DC: The World Bank, Table 32.

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POLITICS OF INFRASTRUCTURAL PROJECTS 187

This represents an excess capacity of approximately 60percent. Whilst it is noted that transportation should play afacilitating role in enhancing the productivity of existingsocial and economic activities, low usage and excess capacityrepresents a serious wastage of resources. This is confirmedby Macpherson (1993) who asserts that “providing excesscapacity at any part of the network is wasteful of resources. . . .

An ideal transport network would be one in which supplyexactly meets demand without there being any sparecapacity.”13 The consultant further noted that based on dailystatistics on the usage of the highway the current demandfor the highway is below the original projections. He indicatedthat very recent recommendations to the current governmentemphasized the fact that given the low traffic volume andthe rising costs of construction, it is in the country’s bestinterest to downscale the other phases of the highway.

The existing facts prior to the implementation are clear.Jamaica already had an extensive transportation network, ofwhich the majority was badly in need of repair. The practi-cality of proceeding with the project was therefore alwaysin serious doubt. It is now clear that a poor country hasinvested a great deal of its capital in constructing a costlynew road with an excess capacity of approximately 60 percent.The traffic growth over the past few decades have at no

point shown the growth rates to warrant such a large projectionfor traffic demand, and therefore public officials shouldhave considered whether implementing the project, especiallyat such a grand scale, was ever necessary or justifiable.

Accuracy of the Policy Advice on Highway 2000

This sub-section seeks to ascertain the extent to which thepre-implementation studies of Highway 2000 were rigorousand accurate. Flyvbjerg (2005) notes that one of the majorproblems associated with infrastructure projects relates tomisinformation surrounding the decision as to whether toproceed with a particular project. At times this misinformationmay be deliberately and strategically provided so as topresent projects in an overly optimistic light. This increasesthe unpredictability of the outcomes of such infrastructuralprojects, both at the national and community levels.

Flyvbjerg’s (2005) conclusions are shared by Weller andStevens (1997), who note that the decision to invest in a projectis largely based on the quality of policy advice and recommen-dations provided to policymakers. They argue therefore thatgovernments should implement systematic tests which allowfor the assessment of the quality of advice they are provided.

A review of the studies that informed the decision toinvest in Highway 2000 showed that the government ofJamaica did try to be thorough in the number of studiescommissioned for assessing the feasibility of and monitoringthe implementation of the Highway 2000 project. Several

13Macpherson (1993) acknowledges that the transportation networkshould be flexible for future expansion.

TABLE 2 Comparative Country Analysis of Ratio between Road Network and Number of Cars

Country Number of Motor Cars (1993) 000s Number of Motor Cars (2001) 000s

Ratio Cars/Road Network

1993 2001

Jamaica Passenger - 81 Passenger - 129.4 0 0.1commercial - 36 commercial - 65.2 0 0

Trinidad & Tobago Passenger - 159 Passenger - 229.4 0.1 0.1commercial - 39.2 commercial - 53.9 0 0

Argentina Passenger - 4,856 Passenger - 5,386.7 5.7 6.3commercial - 1,664 commercial - 1,004 1.9 1.2

Costa Rica Passenger - 220.1 Passenger - 354.4 0.2 0.3commercial - 114.9 commercial - 184.3 0.1 0.2

Mexico Passenger - 849.3 Passenger - 1,253 1 1.5commercial - 316.7 commercial - 431 0.4 0.5

Brazil Passenger - 8,098.4 Passenger - 15,210 11.5 21.6commercial - 1,839 commercial - 4,256.7 2.6 6

India Passenger - 3,361 Passenger - 6,042 3.8 6.8commercial - 4,961 commercial - 8,438 5.6 9.4

Japan Passenger - 40,772 Passenger - 53,541.2 6.0 8.9commercial - 21,132 commercial - 18,103.6 3.5 3.0

USA Passenger - 189,291.5 Passenger - 221,821.1 13.4 15.7commercial - 7,959.6 commercial - 8,607.2 0.6 0.6

UK Passenger - 21,291 Passenger - 25,822 3.4 4.2commercial - 2,990 commercial - 3,497 0.5 1.8

Source: United Nations. Statistical Yearbook, 48th ed. (2004). New York: United Nations, p. 531.Infrastructure for Development, Table 32. In World Development Report (1994). Washington, DC:The World Bank

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studies were conducted before and after the beginning of theproject including:

1. a prefeasibility study that focused on the technicalaspects and the economic potential of the project;

2. An Economic Cost-Benefit analysis;3. Alignment maps;4. Draining and Hydrology Reports;5. Utility Relocation; and6. Land and Aerial Mapping.

This section of the analysis, however, focuses on onlytwo reports, which are generally referred to by policy-makers in press releases and newspaper inserts as the basesfor making their decisions. They are the pre-feasibility study,which was completed prior to the government’s decision toproceed with the project, and the economic cost-benefit anal-ysis, which was submitted a few months subsequent to thedecision to construct the highway. This study conducts theevaluation by determining the value, worth and rigor of thereports to making the final decision (Clarke, 1999). Specialattention was given to issues such as the project objectives,as detailed in the reports; and the quality, completeness andtimeliness of data. The policy process was also assessed todetermine whether the necessary steps were taken to ensurethat the policy initiative selected was correct.

The pre-feasibility study and the economic cost-benefitanalysis were conducted by external consultants to determinethe economic feasibility of the Highway 2000 project. Thereport sought to define and explain the problems with theJamaican road network, which Highway 2000 was expected toaddress. The report indicated that Jamaican roads are oftensteep and narrow and, in some areas can exist in mountainousand difficult terrain. These obstacles, coupled with the low sur-face quality of the roads, made travelling within the countrydifficult, often unsafe, and inefficient.

Major inefficiencies were observed in the followingareas:

1. the movement of goods and people across the island;2. the spatial development of land along roadways; and3. the confinement of tourists to specific “tourist areas”

The Highway 2000 project was therefore expected tocorrect these inefficiencies. The consultants also utilizedseveral sources of secondary and primary data to informtheir conclusions. The sources of information included:

1. Forecasts of the magnitude of daily traffic betweenspecific origins and destinations across the island;

2. Aerial maps of the Jamaican terrain; and3. Origin - Destination surveys.

Though attempts were made to produce a comprehensivedocument to provide complete information for public officials

to use to arrive at the final decision, a number of gapsexisted that call into question the quality of the advice onwhich the decision was taken to proceed with the project.These gaps include the assumptions and methodologiesutilized in arriving at the conclusion that the Highwaywould actually address the problems that had been identi-fied. Very little was ever done to show how this particularpolicy initiative would, with any level of certainty, actuallyimprove the movement of goods and people across theisland, and lead to increased economic activity along thehighway’s corridors. Strong statements were made to thiseffect, but there is no evidence of any attempts to identifyprecisely how the construction of the highway wouldachieve such a goal. Therefore, even though Highway 2000might yet have the potential to achieve the objectives high-lighted in the prefeasibility report, the assumption that itwould definitely address Jamaica’s transportation and devel-opment problems was (and remains) untested and unproven.

Additionally, even though attempts were made to ensurethat sufficient data were used in the decision-makingprocess, the timeliness and accuracy of that data were com-prised. The origin-destination survey used to understand themovement of goods across island, and which ultimately fedinto a cost-benefit analysis to determine the viability of theproject, was conducted in 1969. The average daily trafficprojections based on an assumed constant 3 percent annualincrease by the consultants, was as high as 52,000 in 1996and 109,000 by 2021 for a traffic count from Kingston toSpanish Town.14 Statistics, however, revealed that the averagedaily traffic up to April 2004 for the use of the first leg ofthe highway was 11,589, and peak daily traffic 13,948.15

This enormous disparity between projected traffic flows,and actual demand and usage of the highway was confirmedby a consultant to the government and the Permanent Secretaryof the Ministry of Transport and Works. Both noted that thegrowth rate and traffic volume first projected, given theeconomy’s activities at that time, has not been sustained. Aconsultant to NROCC further indicated that a gap betweenthe projected figures and the actual usage level, resulted inthe recent increase in the toll fees, as the government couldnot subsidize the shortfall in guaranteed toll price increasesto the private contractors.

It is unfortunate that the Government apparently failed torealize the significance of these overly optimistic forecasts.This failing is remarkable, given that the President of theJamaica Institute of Architects, in a public discussion of thehighway, had raised the issue prior to the implementation ofthe project. He had argued that the Pre-feasibility Study wasbased on the unrealistic assumption of 100 percent of trips

14Projected traffic count from Spanish Town to May Pen was 20,000for 1996, and 22,000 for 2004. Highway 2000 Project: Final Report of aPre-feasibility Study by Dessau International, Canada commissionedJanuary 1997.

15Ministry of Transport and Works 2002–2004 Highlights.

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POLITICS OF INFRASTRUCTURAL PROJECTS 189

being assigned to the highway, and even with such overlyoptimistic projections, the highway was still at best marginallyeconomically feasible.

The consultants to the project had also outlined a numberof such concerns to be considered in the final decision toconstruct the highway. The consultants concluded thatalthough the project was technically feasible, its economicfeasibility was in doubt, and needed to be further studied.They further noted that traffic bottlenecks in and out ofKingston could be worsened with the implementation of theHighway, especially in the morning hours, as the volume oftraffic discharged into the existing narrow roadways beyondthe highway could create severe bottlenecks. They alsoaddressed the issue of the quality of the data used in thestudy. They argued that “obviously, the tools used in thisstudy: maps, traffic and demographical data were extremelylimited in details and completeness,” and concluded thateconomic indicators required by financing agencies of privateinvestors should be based on stronger tools to determine thecosts and revenue benefits of the project.”16

In spite of such clear cautions, and concerns about thelimitations of the pre-feasibility study, possible consequenttraffic bottlenecks and the economic feasibility of theproject, the government in 1999 announced that it intendedto proceed with the Highway 2000 project.17 Even thoughthe need for a more accurate cost-benefit analysis wasacknowledged to confirm whether or not the project waseconomically feasible, three qualified bidders for the con-struction of the project were identified prior to the receipt ofthis cost-benefit analysis. The fact that the decision wasmade to build the highway even before the submission ofthis crucial report, implies that considerations of economicfeasibility did not have a significant influence on the finaldecision to construct the highway. In fact, numerous publicpersonalities and commentators in the daily newspapers atthe time queried why the government was in such a rush toimplement the project. The line of questioning now seemsespecially pertinent, given that it is now clear that thegovernment itself knew that it did not have all the necessaryinformation on which to base its decision.

The Content of the Policy Document Related to Highway 2000

The large variance between the forecasted and actual benefitsand costs related to the Highway 2000 project raises impor-tant questions about the accuracy of forecasting techniquesutilized by those who inform the policy process, and therealism of the assumptions used in the models constructed.This then leads to further questions about the expertise of

those informing the policy process, which in this case actuallyextended to include the responsibility for the drafting of thepublic-private partnership, which was then signed by theJamaican government.

The Permanent Secretary in the Ministry of Transportand Works noted that this area is one from which lessonshave been learned for future public private partnerships. Hehighlighted conflicts between the public-private partnershipcontract and the country’s Toll Act (which was enacted sub-sequent to the project), as a problem area which should havebeen avoided. He noted that the legal framework shouldhave been in place before the decision was taken to enterinto a contract with the private contractors. The fact that thiswas not done has now created a situation where specificclauses in the contract have the effect of restricting futureplans for development or may significantly increase the costof such plans. For example, clauses in the contract state thatif the government engages in any project that competesdirectly with the highway and causes the private contractorsto lose revenue such as through alternative route constructionor rehabilitating competing sections of the railway system,then the government is obligated to pay the private contractorfor any loss in revenue. This means that the governmentcould assuming additional financial risks having to paypenalties for investing in other projects, and losing incomeas a result of forgone investments.

Other clauses prescribe that private contractors have solepower to set the toll rate. If the government objects to thetoll fee and decides that it should be lower, it is obligated tocompensate the private investors for the differential in thetoll rate. Therefore, though the Highway 2000 project istouted as a private venture, the government bears a significantproportion of the financial risk of the project. As a result ofsuch financial risks, the government entity NROCC, is nowforced to repay accumulated losses of $9.3 billon. There arealso future financial risks, particularly, the increasing costsassociated with construction of phase 2 of the project, whichthe cost-benefit analysis has shown to be the less viable ofthe two phases. Cumulatively these are very high risks for acountry which is already heavily indebted.

Alternatives Considered

Another important aspect of the policy process is the con-sideration and assessment of alternative strategies. This is acritical step in the rational selection and implementation ofpolicies in the policy process, as scarcity of resources(particularly in developing countries) restricts governments’ability to undertake all the expenditures required in a country.Policymakers are therefore expected to choose projects thatyield maximum benefit to their countries. The scarcity ofresources in Jamaica is particularly challenging, as thecountry has been encumbered by decades of high debt toGDP ratios. It is essential, therefore, that the country’sresources are used in an optimal manner.

16Highway 2000 Project: Final Report of a Pre-feasibility Study byDessau International, Canada commissioned January 1997.

17Highway 2000 Project: Preliminary Design Phase, Economic Cost-Benefit Analysis Dessau International, Canada, July 2000.

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190 TENNANT AND CLAYTON

A review of the studies conducted prior to the decision toproceed with the development of Highway 2000 made nomention of alternative strategies to the highway beingassessed to ascertain whether similar or more benefits couldhave resulted from other projects. A representative from theAssociation of Architects and Engineers had urged that theproject be downscaled as an alternative to the grand approachto the highway, but there is no evidence that such concernswere considered, as no subsequent report was prepared toexamine the viability of the project at a smaller scale.18

Evidence from the literature suggests that other optionsshould have been considered, as it is argued that in regionswhere roads already exist, the rehabilitation of existing roadsyields a better rate of return than newly constructed roads.

Another possible alternative to the Highway 2000 projectwould have been the rehabilitation of the railway system toimprove transportation throughout the country. A number ofstudies have been conducted to determine whether investing insuch a project would be feasible and beneficial. Discussionsalso were being held prior to the Highway 2000 projectbetween the countries national investment bank and the foreigninvestors. The reports from the Economic and Social Survey ofJamaica highlighted that these efforts started in 1998 and con-tinued until 2001. In 2002, however, it was reported that thework on Highway 2000 was in progress, and by 2004 negotia-tions for the rehabilitation of the railway were terminated.

The then Minister of Transport and Works explained bynoting that the agreement between the consortium for therehabilitation of the railway system and the governmentwere at loggerheads because of the uncertainty with thedemand for the railway given the construction of Highway2000.19 This was confirmed by the Past Minister of Financeand Planning, who explained that the reason for the discon-tinuation of the railway negotiations after the implementationof Highway 2000, was that the bidders for the rehabilitationof the railway felt that the highway would have impactedtheir level of ridership. The company was not willing to putup the capital without certainty that a competing modewould not have taken away from its usage. The highwayproject therefore became a source of conflict for the imple-mentation of the railway system.

Discussions surrounding the Railway however resurfaced,and plans to continue with that project have been noted bythe Permanent Secretary to the Ministry of Transport andWorks. The fact that there are concerns about the efficiencyof having both the highway and the railway system in termsof the level of demand for both, and the fact that the railwayis still being considered as a viable project, suggests that theHighway was never assessed as being a better alternative tothe development of the Railway.

Keeping an existing bypass in its original form alsocould have been considered as an alternative, but the bypasswas subsumed into Phase 1a of the tolled highway. This isparticularly so because the construction of the bypass wasundertaken with borrowed funds from the Kuwait government,a loan which the government is currently repaying. TheBypass project also provided a number of benefits includingdecreased pollution, reduced fuel consumption, increasedsafety, reduced motor vehicle costs and better access for all,as it was not a toll road with restricted access.

Detailed financial and technical studies were conductedto ascertain the viability of the bypass project in 1993. Itwas found that the projected EIRR was 28.25%, which is fargreater than the rate of return of 19 percent which was pro-jected for Phase 1a of Highway 2000. The capacity of thistwo-lane bypass was also noted to facilitate traffic of 1500vehicles per hour.20 This capacity is more than twice thecurrent traffic flow on the roadway, which is in excess of600 vehicles per hour between 6:00a.m and 7:00 p.m.21

This is significant because the Bypass, a two-lane road-way, given the current usage level, has an excess capacityof 900 vehicles during peak hours. Highway 2000, which isa four lane highway, has a far greater excess capacity.Macpherson (1993) argues “the more travellers that thereare on a particular link in a network, the less the unit cost,the more likely it is that consumers will choose to bear thatcost.” In the case of Highway 2000, the capacity far out-weighs the use of the service, and as such, high toll fees arecharged to recoup the cost of construction. This toll burdencould have been eliminated if the bypass had remained in itsoriginal form, with possibly no loss in developmentalpotential or travelling benefits to the public. The restrictedaccess to the highway has proven to be a significant deter-minant of its low usage by communities adjacent to its cor-ridors. The Old Harbour Bypass was a free access roadwhich therefore may have resulted in broader positiveimpacts on the communities.

CONCLUSION

The article investigated aspects of the policy process for theimplementation of the Jamaican Highway 2000, andunearthed the extent to which the decision to proceed withthe project was evidenced-based policy making in practice.It was clear that in numerous areas the development of thehighway could not have been a totally rational decision, thatis, in accordance with the findings of sound, rigorous andcomplete information. The government hastily announcedits intention to undertake the project, even before an accurate

18‘Scale Down Highway 2000’ The Gleaner, Saturday, September 8, 2001.19‘Railway Talks to Continue in February’ The Gleaner, Friday,

January 16, 2004.

20Environmental Technical and Analytical Services (1998).21In the hours between 1:00a.m and 4:00a.m flows on average is less

than 50 vehicles per hour. Estimates provided by the Ministry of Transpor-tation and Works.

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POLITICS OF INFRASTRUCTURAL PROJECTS 191

cost-benefit analysis could be done to confirm whether theproject was financially feasible.

Sadly, the current situation is that the current usage of thehighway is not sufficiently high to maintain the toll cost at anaffordable level. The decision to construct the highway waseven taken in spite of numerous caveats included in the pre-feasibility report, cautioning as to the need for further studies.It is of particular concern that there were clearly numerous crit-ical gaps in the policy advice provided prior to and duringimplementation of the project, many of which resulted in sub-optimal outcomes, including several overly-optimistic assump-tions for the traffic projections for the use of the highway, andunrealistic expectations that the government would be able toaccess low cost funds for the construction of the highway.

The Minister of Finance and Planning in office duringthe commencement of the project himself made it clear thatthe best approach to the financing project was not used.Additionally, there is little or no evidence that there was anyserious consideration as to whether the construction of thehighway was actually the best use of the country’sresources. Alternatives were not assessed, so there was noway to determine if the government could have gained abetter return on capital and/or been more effective inimproving the welfare of citizens through some other initiative.

This raises the important question of why the decisionwas made to proceed with the Highway 2000 project in theabsence of essential assessments and evidence as to theeconomic and financial feasibility of the project. The pastMinister of Finance and the Permanent Secretary of theMinistry of Transport and Works indicated that paramountconsideration was given to technical feasibility studies ofhow to reduce travelling time across the island; the fact thatother assessments were not even done indicates that littleimportance was attached to any other factors.

There were also a number of suggestions in the ensuingpublic discussion that the decision to implement the project(particularly at such an ambitious scale) was made in large partto assist the incumbent party to secure another term in office.While this was not positively confirmed by the past Minister ofFinance, there were suggestions that the desire for a legacy bythe leader of the incumbent party (who retired shortly after-wards) may have made it easier to accept overly optimistic pro-jections and advice about the financial feasibility of this“prized infrastructure project.” He was, however, quick to notethat such motivations are not unusual in the Caribbean context,and on occasions have resulted in successful outcomes.

What is, however, clear is that in this instance the Jamai-can government’s divergence from the rational evidence-based approach for the formulation and implementation ofseveral aspects of this extensive and costly infrastructuralproject that has created numerous additional challenges forthe country, including, inter alia, increased financial risksand public debts, and significantly underutilized capacities.In this extremely difficult global environment Jamaica andother developing countries governments can ill-afford such

casual and irresponsible approaches to decision-making inthe public sector. Any sub-optimal usage of nationalresources has far-reaching implications for social and eco-nomic development.

Aspects of the policy process, such as explaining alterna-tive options, assessing the quality of policy advice andincluding the ideas of the wider public prior to the imple-mentation of a project are clearly essential, as they help toimprove the efficiency and effectiveness of a project, andreduce the risk of unwise investments. Though some measureswere implemented to ensure the soundness of the project,several key steps in the policy process were clearly missing,or were grossly inadequate. These clear and avoidablemistakes do not auger well for the long-term outcome of theproject. Some of the current risks with the project could havebeen substantially reduced had the government relied moreon evidence-based decision-making.

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Parsons, W. (1999). Public Policy: An Introduction to the Theory andPractice of Policy Analysis. Edward Elgar Publishing Limited,Cheltenham, UK.

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Sanderson, I. (2006). Complexity, ‘Practical Rationality’ and Evidence-Based Policy Making. Policy and Politics, 34(1), 115–132.

Sutcliffe, S., Court, J. (2005). Evidence-Based Policymaking: What is it?How does it work? What Relevance for Developing Countries?.Overseas Development Institute, November 2005. www.odi.org.uk/resources/download/2804.pdf

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