Overview
Privatisation in Jamaica refers to the divestment of state-owned enterprises (SOEs), assets, or shares into private hands through sale, lease, concession, or public-private partnership (PPP) arrangements. It was introduced as part of broader economic reform programs aimed at reducing the fiscal burden of loss-making enterprises, improving efficiency, attracting private investment, and allowing the government to focus on its regulatory and policy-making role rather than day-to-day commercial operations.
Privatisation has also been seen as a means to encourage competition, enhance service delivery, and stimulate economic growth by leveraging private sector capital and expertise. Over the years, it has evolved from ad hoc asset sales to a more formal, transparent, and policy-driven process governed by structured guidelines and oversight mechanisms.
History
Early 1980s: Privatisation began as part of broader economic reforms. The government sought to reduce its role in directly managing commercial enterprises and instead rely on the private sector.
1991: A major policy milestone was the adoption of Ministry Paper No. 34, which formalised the rationale and procedures for privatisation. It established clear institutional roles, particularly for the Privatisation Committee and the National Investment Bank of Jamaica (NIBJ).
1990s–2000s: Significant divestments included National Commercial Bank, Caribbean Cement Company, Jamaica Public Service Company, and Sangster International Airport. After these high-profile transactions, the pace slowed.
2012: A revised Privatisation Policy was approved to modernise the framework in light of new fiscal pressures, regulatory requirements, and stakeholder expectations. This version emphasised transparency, efficiency, and alignment with national development goals.
Present Framework: Privatisation now focuses on streamlining the process, ensuring value for money, encouraging private sector-led growth, and reducing government exposure to commercial risk. It prioritises infrastructure and services where private investment can expand productivity and competitiveness.
Regulatory Framework
The Privatisation Policy governs the transfer of assets or shares held by public bodies, ministries, or departments of the Government of Jamaica (GoJ) to the private sector. The Public Private Partnership (PPP) Policy serves as an addendum.
For this Policy, divestment and privatisation include any transaction transferring ownership or significant control to a private firm, such as:
Sale of assets or shares
Lease or concession
Management contracts
Outsourcing or PPP contracts
All GoJ bodies seeking to privatise assets (other than land and houses) fall under this framework.
General Principles
Cabinet-approved items for privatisation will be publicised.
Market valuation sets disposal prices.
Where government funding continues, a value-for-money analysis is required.
Transactions must be at arm’s length, with equal opportunity for investors.
Parties with conflicts of interest will not guide the process.
Public announcements will be made for each entity or asset.
Decisions must consider inventories of state assets, budgetary, economic, and social impact.
Employee welfare must be prioritised.
Timelines should reflect available technical, human, and financial resources.
Exemptions
This Policy does not apply to:
Transfers within the public sector (managed by ministries with Cabinet approval).
Divestment of Crown Lands and government houses, which follow separate Land or Housing Divestment Policies.
Land divestment by agencies such as DBJ, UDC, NHT, SCJ Holdings, and FCJ, which have separate frameworks but must still follow the general Land Divestment Policy principles.
Disposal of fixed government assets (e.g., vehicles), which follow another policy.
The Process
The basic requirements for privatisation transactions are that they must be transparent, at arm’s length and guided by market and economic valuations. In order to fulfil the requirement for transparency, entities to be privatised must be advertised in the print and electronic media.
The privatisation process may involve the following steps:
Approval of Privatisation List
After Cabinet approves the list of entities for privatisation, which have been ranked and prioritised, the Privatisation Agency will implement the privatisation programme. The list of assets to be divested would be publicised indicating their state of readiness.
Appointment of Enterprise Teams
Cabinet or the Privatisation Committee of Cabinet or the relevant Ministry/Agency will appoint an Enterprise Team for each privatisation, as recommended by the Privatisation Agency.
Approval of Privatisation Strategy
The Enterprise Team approves the appropriate method for privatising the entities, in accordance with the Government of Jamaica’s objectives for privatisation, and the policy relating to the ownership of assets. The selected modality and strategy is submitted to the Privatisation Committee of Cabinet for consideration and approval. After the Privatisation Committee’s approval, Cabinet will indicate final approval.
Information Memorandum or Request for Proposals (RfP)
Once the modality and/or strategy is approved by Cabinet, the Privatisation Agency will prepare an Information Memorandum (IM) or Request for Proposals (RFP) document, which includes background information on the entity’s operations and financial performance, as well as the bidding process and evaluation criteria.
Valuation
The Enterprise Team will commission a valuation of the asset/enterprise to be privatised. The Enterprise Team, at its discretion, may require a second valuation, provided that the cost to do so is not prohibitive.
Pre-marketing
The Government of Jamaica, through the Enterprise Team will be allowed to pre-market the opportunity to targeted prospective investors, prior to the commencement of the Bidding Process. The opportunity should only be pre-marketed when the Government is in a position to proceed with the privatisation of the asset.
Advertisement of Opportunity
The privatisation opportunity must be given the widest possible exposure within the context of limited funding. The Privatisation Agency will advertise the sale or lease of the entity via local and/or overseas media including print and electronic media. The advertisement period will depend on the type and state of the asset, complexity of the transaction and the Enterprise Team’s decision, however the duration should not be less than one month. The advertisement will include a submission deadline date for the proposals or bids and indicate that an IM or RFP is available.
Bid Bond
The Enterprise Team may require bidders/prospective investors to submit a “good faith deposit” or bid bond along with their proposal.
Evaluation
After the bids/proposals are submitted by the potential investors, they are evaluated by the Enterprise Team and ranked. The highest-ranked bid or proposal is recommended as the “Preferred Bidder”.
Due Diligence
The Privatisation Agency conducts an independent due diligence exercise (e.g. credit checks, etc.) on the potential investors.
Preferred Bidder
The Privatisation Agency submits a report recommending the Preferred Bidder to the relevant Ministry or Board of Directors of the owning Agency, as appropriate, then to the Privatisation Committee for approval. After receiving the requisite approvals, the selected bidder will be formally advised that they are the Preferred Bidder.
Negotiations
After the relevant Board/Ministry and Cabinet approve the preferred bid or proposal, the Enterprise or Negotiating Team commences negotiations with the selected investor if necessary to finalise the privatisation terms and conditions, including price, payment plan, period of privatisation, options and the development plan, etc.
Approval of Negotiated Privatisation Terms
The Privatisation Agency prepares a submission to its Board of Directors recommending the terms negotiated by the Enterprise Team, for approval.
Closing
On receipt of approval from Cabinet, the Privatisation Agency will finalise the transaction, including execution of the required legal agreements.
