Road rehabilitation in the Scotland District in the works

Prime Minister Mia Amor Mottley and China’s Ambassador Yan Xiusheng sign a framework agreement paving the way for a concessional loan from the EXIM Bank of China to fund road rehabilitation of 224 kilometers (56 roads) of roads in the Scotland District valued at $230 million Barbados dollars. [Photo credit: PMO Barbados]

Good morning, everyone. Let me thank everyone for coming. Ambassador, let me thank you for also being here at such short notice. Deputy Prime Minister, Permanent Secretary in the Ministry of Public Works Mark Cummins, members of Foreign Affairs. 

This is an important morning for us in Barbados. Over the course of the last few months, you would have heard us speak as a government about the fact that we were in the process of negotiating and settling a loan agreement with the Chinese government with the EXIM Bank of China, to be more precise, for $230 million Bardados dollars or $115 million US dollars. The agreement that we will sign eventually will, in fact, with EXIM Bank be at the interest rate of 2%, which is highly concessional as you would appreciate, because if we went to market we would be paying a lot more for the money that we are borrowing. 

In order to facilitate that, the government of China has kindly agreed through this framework agreement that we will sign in a few minutes to be able to allow us to pay at an interest rate of 2% over 20 years, while they subsidize the difference between that 2% and the market rate that the EXIM Bank would normally settle with, which would be somewhere between 4.5 to 5% over the course of the loan. Our calculations would tell you that when you look at that amount over the period of the 20 years, you’re effectively looking at $85 million Barbados dollars in subsidy or the equivalent of $42.5 million US dollars. And therefore, we want, on behalf of the people of Barbados, and the Government of Barbados, to thank the people and government of the People’s Republic of China for so graciously agreeing to provide that subsidy, while allowing us then to service the 2% interest on the $115 million USD, which is by far, a smaller amount when you look at the market rates. 

This Scotland District road rehabilitation project is particularly important to my government. As you know, the Scotland District covers one seventh of the land area of Bardados and has been regrettably at the mercy of erosion, and I almost want to say, for too long, for others, it was ignored. 

When the slippage in particular started more than a decade ago, it was not contained, and anything that is not contained eventually gets worse, on the rate of attrition or erosion, equally becomes worse. It is for that reason that my government took a decision early on, that the rehabilitation of these roads is absolutely critical in spite of the fact that we are in an IMF program, in spite of the fact that we are in a COVID pandemic, in spite of the fact that we also are still recovering from the consequences, particularly with respect to housing from Hurricane Elsa and the freak storm. 

Indeed, the reality is that there are 224 kilometers of roads (56 roads to be precise), that will be done as a result of this loan. This is critical to the stability of a large part of our country and to those people who live in the eastern Parishes, in particular St. Andrew, St. Joseph, St. John, in particular parts of St. Thomas and parts of St. Lucy, St. Peter. 

The truth is that early on in the life of I said, this administration forgot there’s a new administration. But early on in the life of our initial assumption into government, one of the major tour operators in Barbados took a decision to stop carrying tour buses on the east coast in this country. I don’t think that people who are not Barbadian understand the significance of that because the east coast for many Barbadians is that pride of place where we get to show the world the beauty of this country and for us to have that deprived from us both personally for those of us who have family who come back but also visitors who know nothing about the country but who want to see the glory and beauty of the country would have been a hard, hard pill for us to swallow. And therefore we’ve set about from as far back as then in terms of trying to find the financing that is affordable and a mechanism for sustainable development of our roads. 

We continue to have to shore up a large part of that part of the island. That’s why you see the government embarked two years ago on a gabion construction and stabilization program because we know well that the gabions work and that they allow us therefore to be able to try to stabilize as much as we can. But this project, more than any other as we seek to deal with road upgrading, reconstruction of roads and major repairs to other roads, new asphalt paying, some bridge-building; we believe that over the course of the next few years, over the life of this project, we will do much to stabilize the Scotland District. 

My government has also signaled the intention as soon as it is able to do so, to get the Scotland District Authority up and running. The truth is that it was one of the last pieces of legislation that we passed in the Owen Arthur government in 2007. Our ability to be able to manage our fiscal space and all of the adjustments under the IMF program would not have made it possible for us to get the Scotland District Authority up and running before. But we are now satisfied, especially as we seek to turn the corner with this pandemic, that there must be a rationalization of institutions, particularly the Soil Conservation Commission, which is too narrow and even though there will continue to be major work on soil regeneration, ironically, we’ve had the institution, but we’ve never had a major program of regeneration of soils, but only stabilization from the point of view of erosion. 

So that the Scotland District Authority looks at all of that and much, much more because it is about stabilizing the lives and livelihoods of the people living in the Scotland District, which, as I said earlier, is one seventh of the land space. 

Without more, I will now invite His Excellency, the Ambassador, to say a few words, and then we proceed to the formal signing. 

Thank you. 


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