JUTC Testing Chinese Made Bus In The Hills of St Andrew; Is Automotive Assembly On The Horizon?

News came mid-week, of a pilot project to test Chinese buses on hill routes of St Andrew. The Golden Dragon made buses are variant to Jamaica urban transit company's (JUTC's) main fleet, that includes the Swedish made Volvo buses and Belgian made VDL Jonckheere buses. The Golden Dragon buses are said to be smaller to their main counterparts, with 39 seats, as was stated in a Jamaica Observer article entitled JUTC testing Chinese-made smaller bus for hill routes.

Golden Dragon buses, not unlike the one being tested by the JUTC. Source of image: Hotel Shodlik Palace

The aforementioned bus shall undergo an eight week pilot on JUTC's number 53 route, stopping at above rocks in St Andrew. The pilot seeks to determine the suitability of the Chinese made bus on St Andrew's challenging hill terrain. Successful completion of the pilot should see these buses being deployed on routes 53, 54, 97 and 61. Possibly beckoning the start of a rural bus system.

Fear Of Chinese Products And Golden Dragon Buses

The words "Made In China" often begets reponses such as inferior, no good, spurious/counterfeit, etc. Though not completely false, these responses should not be taken in totality, as numerous good to high quality products are made in China. Especially true in the manufacturing of consumer electronics; top manufacturers include Lenovo, TCL Corporation, Huawei, ZTE and the rapidly growing Xiaomi.

Additionally, progress has been made to popularize Chinese brands in the auto industry. However, the Chinese automotive industry is dominated by European and east Asian manufacturers. a Bloomberg article entitled How China Protects Its Auto Industry, suggests that Chinese brands account for 34.5 per cent passenger cars.

This leads us to the Chinese bus being tested by the JUTC, made by Xiamen Golden Dragon Bus Co., Ltd. The firm was established in 1992, employing 4000 individuals and has an output of 40 000 buses annually. Subsequent to the announcement made by the JUTC of the possibility of the Golden Dragon buses being added to their fleet, Jamaicans sounded the alarm bells, questioning their build quality.

However, the buses are built to ISO 9001:2000 standards. Golden Dragon's website suggests that their buses are also sold in 80 countries. This may come as a surprise to many Jamaicans, Golden Dragon's parent is the more popular KingLong. Kinglong made buses are included in Knutsford Express's fleet. I should also add that the bus is using an American made engine. :)

Is Automotive Assembly On The Horizon?

Von's motor and company, local distributors of Golden Dragon buses, are known to assemble bikes in Jamaica. In fact, the venture commenced operations in 2004, assembling bikes made by Loncin Group. This may bode well for more large scale assembly, especially with the Chinese showing great interest in Jamaica. Additionally, with the recent tabling of a special economic zone act in parliament, auto assembly should become more attractive.

Thanks for stopping by

References

200 more buses for the JUTC, JIS.
http://jis.gov.jm/200-more-buses-for-the-jutc/

Finance Ministry Waffles On Incentives For SEZ, Jamaica Gleaner.
http://jamaica-gleaner.com/gleaner/20150116/business/business1.html

Von's Starts Bike Production, Jamaica Gleaner.http://old.jamaica-gleaner.com/gleaner/20041117/business/business5.html

About Us, Golden Dragon.
http://www.goldendragonbus.net/company-info.html

Should A Rapid Transit System Be Implemented In The Kingston Metropolitan Area?

My first visit to Kingston, Jamaica's Capital and largest town/city was back in 2003. I was markedly surprised by the difference in day to day living, especially coming from the relatively quiet commercial town of Mandeville, Manchester.

Kingston is largely dissimilar to Mandeville and other towns in Jamaica; with numerous high rise structures and major factories. Plus, life is rather fast; individuals are constantly moving in the ever bustling city of Kingston.

View of new Kingston. Source of image: Romance Journeys.

The 2011 population and housing census, undertaken by the statistical institute of Jamaica (STATIN), revealed that Kingston had a population of 584 627. Additionally, the Kingston metropolitan area (KMA) had 1 041 084 individuals, in excess of a third of Jamaica's population.

The KMA is served by public taxis and buses. However, the primary source of transportation is the Jamaica urban transit company (JUTC), a state owned and operated bus company. The company commenced operations in 1998, with the aim of creating a modern transportation system in the KMA.

JUTC fleet of buses. Source of image: JIS

The total daily ridership to the enity is not certain. However, a Jamaica information service (JIS) news piece entitled  JUTC Sets March 2014 deadline For All Passengers To Access Smarter Cards, suggests that the JUTC moved 110 000 concession passengers daily. Indicating that total daily ridership should exceed the aforementioned figure.

Rapid Transit

Miriam Webster defines rapid transit as "the system that is used in cities for quickly bringing people to and from places on trains, buses, etc."

However, the quasi-bus rapid transit system operated by the JUTC is not a true rapid transit system. In other words, dedicated bus lanes are lacking in the KMA; The buses have to contend with daily traffic. Additionally, it is becoming increasingly difficult to expand the roadways in the KMA.

This is compounded by several vehicles on our roads. Estimates are sketchy, however, approximately 500 000 vehicles were said to be on our roads in 2008. Plus, rough estimates evince that approximately 10 000 cars are sold annually.

Moreover, unless import restrictions are implemented, car ownership should increase with an increase in income. A breakdown of registered cars by parish is not available to the public. However, if we are to judge by traffic on Mandela highway and the Portmore toll, then roads in the KMA are overburdened by traffic.

A possible solution to the KMA's congestion problem, can be found by instituting a metro-rail, thereby bypassing traffic laden routes. Such a system should augment the quasi-bus rapid transit system; and regain productivity, lost in traffic. The state may have difficulty implementing a metro-rail, however, it is something to think about.

Thanks for stopping by!

References

Population and housing census, STATIN.http://statinja.gov.jm/PressReleases/pressreleasecensus.aspx

About JUTC/History, JUTC
http://www.jutc.com/history.php

Motor insurance tracking system coming, 30 % of vehicles uninsured - IAJ survey, Jamaica Gleaner
http://old.jamaica-gleaner.com/gleaner/20080406/business/business1.html

Jamaica's Fledgling ICT Sector

Information Communication Technology - or Technologies, It is commonly known as ICT. The initials are often thought to encompass computers and technology. However, in simple terms, ICT facilitates access to information using various communication technologies.

Technopedia, defines ICT - "refers to all the technology used to handle telecommunications, broadcast media, intelligent business management systems, audiovisual processing and transmission systems, and network-based control and monitoring functions."

Visual representation of ICT. Source of image: newtelegraghonline

ICT adoption has significantly grown over the years, with little signs of slowing abating. In fact, Ericsson mobility report is predicting a 12-fold growth between 2012 and 2018. The article entitled Trends in the ICT sector, went on to state, and I quote " This ICT expansion helps economic growth and development, and makes the world a more accessible, open and democratic place."

The expression by Ericsson is not dissimilar to World Bank's take on the ICT Sector. The World Bank suggests that ICT is changing the makeup of the world economy, governments and the society at large. Additionally, the World Bank evince that for every 10 per cent increase in high speed Internet connections, a 1.4 per cent increase in economic growth follows on average.

Jamaica's Emerging ICT Sector

Following the phased liberalization of the telecommunications sector in Jamaica, as expressed in my blog post entitled The Liberalization Of Jamaica's Telecommunications Industry; Impact On The Jamaican Economy And Communications, mobile penetration grew exponentially. The aforementioned rate is estimated to exceed 100 per cent, coming from a low of under 10 per cent before liberalization. However, this rate of growth was not replicated with Internet penetration. A 2013 estimate by the World Bank, suggests that just over a third of Jamaica's population has accessible Internet. Indicating that significant room for growth remains.

However, significant smart phone take up has transformed the means of communications to the Jamaican public. This was evident by Digicel Jamaica's November smart phone sales, available in the news release entitled Digicel Has Sold 60, 000 Smartphones Since November. With greater smart phone adoption, communicating via social media has become effortless and affordable. Additionally, businesses may easily access customer demands through social media platforms.

A commendable step taken by the government of Jamaica, is the recent launch of the tablet in schools program. It is a joint program by the ministry of education, and ministry of science, technology, energy and mining. The aim of the program is to facilitate robust ICT, and greater levels of economic growth. Under the tablet in schools program, approximately 25 000 tablets should be deployed at an estimated cost of J $1.4 billion.

Additionally, the Business Process Outsourcing (BPO) sector has grown markedly since liberalization. Furthermore, Jamaica's Relatively low labour cost and high unemployment rate, makes Jamaica an attractive BPO destination. This is borne out by the approximately 40 BPO firms, employing in excess of 14 000 Jamaicans.

Buoyed by signicant investments in telecommunications and BPO, ICT should continue to facilitate existing and new means of communication by the public. This should allow for greater tech startups, and higher, more equitable GDP growth.

Thanks for stopping by!

References

Information & Communication Technologies Overview, World Bank.
http://www.worldbank.org/en/topic/ict/overview#1

Jamaica Tablet Program For Schools, Addictootech.
http://www.addictootech.com/jamaican-tablet-program-schools/

BPO Offers Good Jobs, Jamaica Trade and Invest.
http://www.jamaicatradeandinvest.org/news/bpo-offers-good-jobs

Internet Users, World Bank.
http://data.worldbank.org/indicator/IT.NET.USER.P2

Precipitous Crude Oil Decline Should Benefit Jamaica...

Crude oil, a naturally occurring hydrocarbon, has been a major source of energy for over a century. By products of crude oil are used in the transport sector, power generation, cooking, etc. In Jamaica, crude oil accounts for close to 90 per cent of our energy demands.

Crude oil barrels. Source of image: Presstv

Data available on the petroleum corporation of Jamaica's (PCJ) website, suggests that 46 per cent of Jamaica's petroleum consumption is used in the transport sector, 33 per cent in electricity generation, 14 per cent in the bauxite/alumina sector, etc. Additionally, it is said that crude oil accounts for approximately 40 per cent of local imports; estimated to be in excess of US $2 billion. A figure comparable to earnings from the hospitality and tourism sector.

However, as we've seen over the years, the price of crude oil has been quite volatile. Placing Jamaica in a vulnerable position whenever a global oil spike occurs. Conversely, a precipitous decline in crude oil prices should benefit Jamaica. This scenario is playing out at the moment. The precipitous decline began in July 2014, largely attributable to excess crude oil supply, and weak global demand.

Chart showing a precipitous fall in Crude oil prices. Source of image: Financial Times

Additionally, as stated in my blog post entitled Could The US Help To Solve Jamaica's Energy Woes?, technological developments in hydraulic fracturing has led to a shale oil boom in the US. Moreover, America's demand for foreign oil has decreased significantly. In addition to the shale oil boom, organization of petroleum producing countries (OPEC) is insistent on maintaining current production levels. Combined with an increase in more efficient cars, this has led to an oil glut.

Should We Hedge?

For the first time in years, motorists are enjoying the benefits of lower oil prices. Not to forget lower Chicken, Bread and electricity prices. On the government side, lower crude oil prices has resulted in a moderation of the inflation rate. This bodes well for consumer spending, and should allow for greater general consumption tax (GCT) intake. Additionally, a shrinking import bill should follow the lower oil prices.

However, crude oil prices are unlikely be suppressed indefinitely. In fact, signs are emerging that the sharp fall in oil prices has abated, with crude oil prices ending the week above US $50 per barrel. It is in this regard, suggestions have been made by the private sector organization of Jamaica (PSOJ), that Jamaica should consider hedging. Hedging is done to limit price volatility of investments, oil typifies volatility.

In this instance, hedging should provide Jamaica sufficient time to correct perennial problems with electricity generation, thereby lowering the cost of electricity. Seemingly, this is the expectation. Word coming from the electricity sector enterprise team (ESET), implies that 330 megawatts of power should come on stream by 2018. 190 megawatts in Old Harbour by the Jamaica public service company (JPS), and 140 megawatts by Aluminum partners of Jamaica (ALPART).

If prudent steps are taken by the government, Jamaica should be well on its way to energy security.

I will certainly revisit the aforementioned topic in the near-term.

References

Consumption statistics by activity, petroleum corporation of Jamaica.
http://www.pcj.com/dnn/Statisticsbyactivity/tabid/143/Default.aspx