Gordon Robinson | A very private public service

So, after the fact, Jamaica learned that Government decided to take US$150 MILLION of our money out of the Consolidated Fund to “lend” to JPS.

Let’s try to contextualize. First and foremost this “loan” sum represents about 0.8% of Jamaica’s GDP. So, in one fell swoop, Government could hand to JPS an amount equal to average annual GDP growth since independence.

Secondly, let’s ask ourselves who is JPS?

JPS is a private company whose shares are 80% owned by international corporations. The Marubeni Corporation of Japan (“Marubeni”) ultimately owns 40%.

Marubeni was incorporated in December 1949 but founded a century before. It currently boasts 126 branches and offices, including “overseas” (i.e. outside Japan); 338 Subsidiaries and 160 Affiliates. According to published financials, gross trading profit for year ending March 31, 2024 was 783.8 BILLION Japanese Yen.

The Japanese Yen and the Jamaican Dollar have the same value. So that’s almost FIVE BILLION US$.

According to Marubeni’s website:

“Marubeni Corporation and its consolidated subsidiaries use their broad business networks, both within Japan and overseas, to conduct importing and exporting (including third country trading), as well as domestic business, encompassing a diverse range of business activities across wide-ranging fields including lifestyle, food and agri-business, metals and mineral resources, energy and chemicals, power and infrastructure services, finance, leasing & real estate business, aerospace and mobility, next generation business development and next generation corporate development...”

Korea East-West Power (EWP) also ultimately owns 40 per cent of JPS. EWP is a Korean power generating company spun off in 2001 from the former Korea Electric Power Co. Ltd that had been powering Korea since 1961. It acquired its JPS shares in 2011 the same year it completed construction of a 300 Mega Watt Diesel Power Plant in Haiti. EWP owns 8 power plants in Korea (total capacity 9,675 Mega Watts); 8 overseas power plants (including JPS) totaling over 2,000 Mega Watts of solar, gas, gas engine and coal.

According to EWP’s website, its latest published financials (as of December 31, 2023) shows total assets of 1 2.1 TRILLION Korean Won (US$10 Billion) and gross profit of 219.7 Billion Won (US$140 million).

Jamaica decided to sell its national patronage to Marubeni in 2007 in order to fritter away the proceeds to cover bloated recurrent expenditure including “run-wid-it” politically motivated bail-outs and vote buying. In 2011, Marubeni shared its ownership with EWP.

These international corporations acquired 80% of an essential national energy provider plus bonuses like a monopoly licence and guaranteed profit margin. But, when adversity affects JPS operations, JPS doesn’t have to go to market for funding as would any other private company?

As at December 31, 2024 Marubeni had a 61% Debt/Equity ratio. As at December 31, 2023, EWP had total equity of 6.4 Trillion Won; total non-current liabilities of 4.5 Trillion Won or a 70% debt/Equity ratio. Yet JPS debt/equity ratio climbed from 100% (2018) through 134% (2023) to 122% in 2025. On November 29, RJR reported:

“ Data released by [JPS] indicate that its debt load increased while its profits decreased during the third quarter, which ended September 30 this year….

The company was carrying a long-term loan of US$273.4 million on its books during the third quarter…compared with US$233.9 million during the same period [IN 2024]. [JPS] was already carrying total liabilities of US$1.1 billion during the [third quarter] .”

So, a Jamaican Government, reeling from a natural disaster that nullified taxpayers’ fiscal sacrifices over 13+ years, casually “lends” a majority foreign owned corporation already burdened with seemingly unsustainable debt a further US$150 million of taxpayers’ money?

But is this loan real? Its announcement came with a confession that crucial loan terms such as interest rates and institutional lending vehicle were yet to be agreed. BUT funds could be handed over immediately?

Will taxpayers, as JPS customers, be forced to repay the loan of taxpayers’ money by way of rate increases or other smoke and mirrors games ensuring JPS pays for nothing? I wonder if the loan is likely to be repaid at all. Minister already raised the spectre of nonpayment and proposed to deduct any arrears from 2027’s takeover price. But why go there? Nobody mentioned non-payment. It seems Minister has run somewhere when nobody pursueth.

This must be the Guy Lombardo Show!

WHY is Jamaica doing this? Is this political panic because people are devastated and Government can see no other solution? If that’s the case why not insist on equity in exchange for the cash infusion? If you fear the “loan” mightn’t be repaid why not make it an equity injection so taxpayers at least get shares in return for this bailout?

Why hand over much needed rebuilding cash from the Consolidated Fund instead of offering a Government Guarantee for JPS’ market borrowing? What are Marubeni/EWP contributing while a minority shareholder is asked to “loan” US$150 million? How much bridging finance are majority shareholders willing to put up or facilitate? Will Marubeni/EWP offer corporate guarantees?

If this is the only source of quick relief for JPS facing the sort of adversity power generators face worldwide especially where natural disasters are commonplace then JPS, as a private entity, is an abject failure. It should never have been divested. Government should move to take it back. If we must fund JPS WHY AREN’T WE MAJORITY OWNERS? Which private company asks minority shareholders alone for emergency loans? And which minority shareholder says take as much as you need, we’ll worry about minor details like interest and repayment schedules later?

As of late 2024, JPS operating revenues that year were approximately US$1.093 billion and total assets US$1.734 billion. Its majority shareholders are hugely successful multi-nationals. Why must Jamaican taxpayers bear JPS’ burden?

The most irritating part is that, when I make these comments, I’m told to shut up because I’m safe in Kingston and don’t feel what western-based Jamaicans feel. If my house had blown down I wouldn’t be criticizing. Based on this puerile proposition, only those with houses and lives destroyed have any say in spending taxpayers’ money to rebuild. When Opposition Leader raised pertinent questions in Parliament he was roundly abused; called “evil’; “wicked”; and “bad mind” instead of frankly addressing his queries.

Obviously, PNP isn’t alone in forgetting that the election campaign ended three months ago.

On Tuesday last, PM told Parliament Government would be borrowing US$6.7 billion to rebuild. Toldja! Three Sundays ago (Do the Math), after pointing out that at least US$6 billion would be needed, I wrote:

“Face it. Jamaica will have to borrow that money from international lenders. So brace yourself for….a 60 per cent debt/GDP ratio….climbing to 90 per cent or more very soon.”

And so it has begun. PM tried valiantly to make it sound like a political victory. When Opposition Leader essayed that this blow to Jamaica’s years of fiscal sacrifice was nothing to celebrate, PM avoided the issue and went off on a rant about PNP MPs distributing hurricane relief inequitably. He called their critiques “malicious.” This right after he’d exhorted us to stop quibbling about what care package was delivered where.

Not one Government MP explained how come a bruk pocket Government, forced to borrow 40% of GDP, could afford to lend a private, foreign owned corporation US$150 million without agreeing repayment terms.

Also on Tuesday, Finance Minister fumbled around while saying the loan was so JPS “can accelerate the rate at which Jamaicans get their light back…”

Accelerate? How? For what EXACTLY is the loan to be used? In an unrelated story, Gleaner’s Wednesday Headline: Wire theft by vandals slows Melissa electricity restoration in St Ann, says JPS.

Sigh.

Then, in direct contradiction to Energy Minister’s earlier announcement that the loan could be disbursed same day, she said we weren’t to “worry” that Jamaica would have to lend “the entire amount”’ because “international partners” have “indicated” that, within the US$6.7 billion, there was US$450 million “for JPS.”

I must be a coonoomoonoo. Who’s borrowing and repaying any part of the US$6.7 billion? JPS? I don’t think so. How come US$450 Million means we won’t be lending the “entire” US$150 million? My maths says 450 is three times 150.

Kmt.

Until we radically reform our governance system, Cabinet members, who currently dominate Parliament, will continue to treat the Legislature like a Village square where calumny, bullying and poor manners pass for debate and citizens taken for fools.

Peace and Love.

Gordon Robinson is an attorney-at-law. Send feedback to columns@gleanerjm.com