Dr Horace Chang says if given the green light from the utilities regulators, the National Water Commission (NWC) could generate even more power than the Jamaica Public Service (JPS).

Chang, who has responsibility for water in the Ministry of Economic Growth and Job Creation, said that currently the NWC’s biggest expense is its electricity bill, which averages around $450 million monthly.

“Of course, if the water supply company is allowed to generate its own power without any kind of guidance or regulation, we could end up producing more power than JPS. If we have hydropower, we can produce so much; we have lands we can produce solar power and not only remove ourselves from the grid in terms of supply sources,” Dr Chang argued.

He was addressing the final day of the three-day 14th Annual Conference of the Organisation of Utility Regulators last Friday, held at Secrets Resort and Spa in Montego Bay, St James.

He called on the utility regulators to examine the relationship between utilities.

“Can exception be made [in] how you do it and in what way it is done that it doesn’t end up superseding the other? That’s maybe the biggest question,” Dr Chang said. “Regulators have to create the framework in which the company itself can move forward; the broader policy of ownership is decided by the Government.”

The water minister explained that under the current arrangement, if the NWC or the National Irrigation Commission were to “produce power for itself and reuse it”, they would have to first be awarded a licence by the Office of Utilities Regulations.

“Under the current regulator, if you produce power, move it from one venue to the next, you need a licence. And if you are doing a licence, it has to be competitively awarded and that creates challenges,” he argued.

“Certainly, I think we can produce power on site, which we intend to do in a couple of our local outlets, but that raises some challenges.”

Another challenge he highlighted was wheeling, which refers to the scheduling of the energy transfer from one balancing authority to another. Since the wheeling of electric energy requires use of a transmission system, there is often an associated fee which goes to the transmission owners.

“The challenge here is not only wheeling for commercial purposes [and] home users, but since a water company can produce water in large amounts, the question of wheeling within the head of the utility becomes relevant. It is something that needs to be addressed,” Dr Chang said.

“The real impact of water is, it also has a social impact, but it has to be produced at an economical rate. And power becomes one of the big cost factors. For irrigation, in fact, we might not be able to provide our southern plain — which is our major provider of food supply — with irrigated water if we don’t have the right to produce some of the power for ourselves, because farmers cannot afford to pay the JPS bills.”

Jamaica Observer

Prime Minister Andrew Holness addresses the opening ceremony of the Organisation of Caribbean Utility Regulators Conference in Montego Bay, St James, yesterday.

Asserting that “we must get it right”, Prime Minister Andrew Holness has urged utility regulators to take seriously their role in helping the Caribbean ease its dependence on oil and embrace technologies and renewables key to energy diversification.

The regulators’ role, he said, is linked to the creation of partnerships with investors who want returns, consumers and governments pushing for the economic development of their countries.

Holness was addressing the opening ceremony for the 14 Organisation Of Caribbean Utility Regulators (OOCUR) conference at the Secrets Resorts & Spa in Montego Bay, St James.

A variety of issues are set for discussion over three days by the more than 160 regional and international experts.

However, Holness, noting the importance of energy to the region’s development and the current high levels of dependence on oil, made it clear that the issue should be at the top of the agenda.

“Energy is clearly the mission-critical frontier,” he said, pointing to the role of Jamaica’s Office of Utilities Regulation (OUR) in helping Jamaica introduce liquefied natural gas (LNG) as part of the energy mix.

“The OUR approved the funding for the conversion of the Jamaica Public Service Bogue plant to enable the move from heavy dependence on oil to diversifying to LNG. I applaud the OUR in this regard for being a strong regulator and helping to make this move a reality – to take Jamaica on this new platform. This is a great example of collaboration among Government, regulator, and utility,” Holness added.

A shipment of LNG supplies arrived in Jamaica last week Saturday, and in two weeks, is expected to be in full use.

TAKE ROLE SERIOUSLY

The prime minister emphasised that regulators have to take seriously their role in helping the Caribbean Community implement the Caribbean energy policy that was approved in 2013.

That policy promotes a shift in sustainable energy through increased use of renewable energy sources and energy efficiency, among other things.

“OOCUR, you have your work cut out for you as not only is Jamaica focused on diversifying its energy mix, so, too, is CARICOM, and we must get it right in the region. Access to affordable energy is a necessary requirement for addressing sustainable development in the region,” Holness said.

He also argued that while there is need for partnership with all stakeholders in the provision of utilities, the providers must insist on self-regulation to ensure that standards are upheld and service delivery is at a high quality.

Earlier, Albert Gordon, chairman of OOCUR, said the conference was happening at a time when regulation was becoming more important for sustainable development.

The conference schedule has placed heavy emphasis on renewable energy and investment.

Jamaica and many other small-island states of the Caribbean are heavy importers of oil, which increases their vulnerabilities to external shocks such as sharp oil price rises. Except for Trinidad and Tobago, the only net exporter of oil and natural gas, all other Caribbean countries are net oil importers.

“For importers other than Suriname, around 87 per cent of primary energy consumed is in the form of imported petroleum products. Imports are mostly diesel fuel for electricity generation, gasolene for transportation, and liquefied petroleum gas used as cooking gas in households,” experts noted in a paper titled ‘Caribbean Energy: Macro-Related Challenges’ released in March by the International Monetary Fund.

This, they said, has led to consistently high electricity rates, which affects the competitiveness and development of CARICOM nations.

Gleaner

New Fortress Energy has committed to recurrent environmental monitoring and reporting on site preparation, construction and operation of the liquefied natural gas (LNG) terminal and pipeline project to be developed in St Catherine.

At a public consultation with residents of Old Harbour, the American company also promised, as far as is possible, to train and employ persons from the community to work at the facility instead of bringing in skill sets from outside.

The gas will be transported to Jamaica from the United States or other markets to a new offshore terminal at Portland Bight, where it will be regasified and distributed via an undersea pipeline to the Jamaica Public Service Company (JPS) power plant, said Managing Director of Fortress Investment Group Brannen McElmurray at the forum on Wednesday.

The main infrastructure will include a berth and regasification platform; a natural gas pipeline; and an automotive diesel pipeline and other facilities. The terminal is to be located on the western side of Portland Bight, about 2,000 metres from the shipping channel to Port Esquivel. It will have a depth of about 14 metres, sufficient to berth a floating storage unit for the LNG as well as LNG carrier vessels without the need for dredging.

McElmurray said the Port Authority of Jamaica has reviewed the general location and concluded it does not interfere with shipping activities. The floating unit, an LNG carrier refitted to for use as a storage vessel, will be located far enough from shore and, hence, will not be visually obtrusive.

Experts have recommended a 500-metre safety exclusion zone around the floating unit in which navigation is restricted.

However, environmental consultant Dr Carlton Campbell, whose company CL Environmental Limited undertook the environmental impact assessment presented at the public consultation, said that zone was reduced to 200 metres based on complaints from fisherfolk.

The exclusion zone would have denied them access to regular sites where they normally harvest fish.

However, one resident was against the compromise reached, saying the zone should not have been reduced to facilitate more fishing, given that the 500-metre recommendation was made by safety experts.

The LNG terminal being developed through NFE South Holdings will supply gas to JPS, which itself is finalising plans to build an LNG-fired power plant at Old Harbour.

According to the environmental impact assessment, monitoring of various aspects of the New Fortress project will be done by persons appointed by New Fortress Energy, the JPS, and “capable organisations”, the latter monitoring water quality, salinity and dissolved oxygen, among other conditions.

However, some residents suggested that members of the Old Harbour Bay community should be involved in monitoring as they did not entirely trust the National Environment and Planning Agency and the parish council to do so on their behalf.

McElmurray said some of the equipment for the project will be offloaded at Port Esquivel and transported by trailers to the Old Harbour Bay site, giving rise to concerns about road damage.

Campbell assured concerned residents that mitigation measures have been put in place for noise from heavy equipment, access road to facilitate movement of heavy vehicles and equipment, potential negative impact on marine life and various other environmental issues.

He said horizontal drilling would be used for the pipeline to ensure the reef is not destroyed, and that the developers would have to work with the fishing community to safeguard fish pots set to harvest fish.

In the regasification process, New Fortress will heat the LNG using seawater to convert it to natural gas and then release the water back to the sea. Campbell assured residents the water would be cooler at release and so would not affect marine life.

During construction an estimated 225 to 250 persons will be employed, McElmurray said. New Fortress Energy estimates that it can start delivering natural gas to JPS at Old Harbour by the second quarter of 2018.

 

When Blue Mountain Renewables (BMR) began operating its 36-megawatt wind farm in Potsdam, St Elizabeth, a few months ago, the facility became Jamaica’s largest private-sector renewable energy project.

Minister of Science, Energy and Technology Dr Andrew Wheatley, who gave the keynote address at the official opening on August 11, pointed out that the wind farm would help to diversify the country’s energy matrix and ease the dependence on imported fossil fuels.

“The wind farm is expected to reduce greenhouse gases by about 66,000 tons of carbon dioxide equivalent per year, roughly equivalent to taking 13,000 cars off the road,” he informed.

Wheatley also applauded the relationship and assistance the company has given to the neighbouring schools, Munro College and Hampton High, as well as the treatment of farmers in St Elizabeth who were affected during the construction phase.

Principal of Hampton High Heather Murray said that she could literally see the ‘wind of change’ with the advent of the BMR wind project.

She bemoans the fact that nearly a quarter of her school’s budget is spent on high electricity cost, money that could be spent on building a state-of-the-art science laboratory.

“BMR brings hope and we welcome them wholeheartedly. We are also excited about the efforts to go green and we are doing our part here at Hampton. Earlier this year, we swapped all fluorescent light bulbs for more environmentally friendly LED bulbs,” Murray stated.

She also informed that Hampton had installed about 12 solar panels to integrate renewable energy into their electric supply. The panels, combined with small wind turbines on the campus, now provide about one-fifth of the school’s energy needs, she noted.

 

TO SERVE THOUSANDS

 

The BMR Jamaica Wind project will serve thousands of customers annually. Power will be sold to the Jamaica Public Service (JPS) Company, under a 20-year power-purchase agreement. This electricity is expected to be among the lowest cost sources of power available on the JPS system.

Jamaica currently relies on oil imports to meet 90 per cent of its energy needs. This leaves the country vulnerable to fluctuating oil prices, which can make it difficult to budget and plan effectively.

To ease the dependence, the country has set a target to generate 30 per cent of its energy from local renewable sources such as hydro, wind and solar power by 2030.

President of BMR Bruce Levy said construction of the project was made easier by the cooperation of the Potsdam residents and the appreciation they showed for the work being done in their community.

“We made sure there was significant benefit to the local and wider community, with billions of dollars of direct spending and employment of hundreds of Jamaicans during construction. We say, without any fear of contradiction, that we are committed to community development,” he said.

Levy informed that the wind farm was made possible through a US$62.7 million financing package, including a US$42.7 million loan from the Overseas Private Investment Corporation (OPIC); a US$10 million loan from the International Finance Corporation (IFC), and a US$10 million loan from the IFC-Canada Climate Change Programme. BMR Energy provided an equity investment of US$26.9 million.

Gleaner

In this August 2016 photo, New Fortress Energy (NFE) hosts a tour of its Montego Bay terminal. Walking the port are (from left) Brendan McElmurray of NFE, Minister without Portfolio in the Ministry of Economic Growth and Job Creation Dr Horace Chang, Attorney General and Member of Parliament for West Central St James, Marlene Malahoo Forte, Ed Marsh of the Port Authority of Jamaica, Johnathan Klion of NFE, and chairman of the Montego Bay Free Zone, Mark Hart.

The plan to build and operate a liquefied natural gas marine terminal and pipeline by American company New Fortress Energy (NFE) will place the facility five kilometres offshore within the Portland Bight area or close to the Goat Islands, according to the environmental impact assessment (EIA) released this month.

New Fortress will execute the marine terminal and pipeline project through affiliate NFE South Holdings Limited. A public consultation on the project is set for September 28 in Old Harbour.

The environmental report done by CL Environmental Consultants Limited on behalf of New Fortress also estimates that the project will provide nearly US$1 billion worth of value over its lifetime and create about 300 direct jobs in the process. Indirect jobs are estimated at 200 to 600.

“Based on this analysis, the final net present value of the project, after application of social cost benefit analysis, turns out to be US$953.4 million. Hence, the project should be undertaken as it has multiple social benefits which are reflected in the final positive NPV of the project,” the report stated.

In arriving at that final figure, the EIA considered the financial profitability measured at market prices; the net benefit of the project measured in terms of economic prices; then adjusted for the impact of the project on savings and investment, income distribution, the impact of the project on merit goods and demerit goods, and the environmental impact.

LNG plan

The project forms part of the wider plan to bring LNG to the national grid. The marine terminal will feed gas to the new 190MW plant that Jamaica Public Service Company is developing at Old Harbour. New Fortress is also supplying gas to JPS’ Bogue plant from a terminal developed in Montego Bay.

The marine terminal EIA report reasoned that consumers, but in particular the manufacturing sector, would benefit from the lower cost of electricity and the establishment of a more reliable power supply.

“This will lead to more possibility of manufacturing that will lead to creation of employment opportunities for unskilled and skilled workers. This is hard to quantify and hence the number are not adjusted for it. Which means that the social benefit stayed below is a lower bound,” the report stated.

The NFE project involves constructing a marine terminal comprising of a vessel berth and offshore offloading and regasification platform.

“The location will be up for approval by the Port Authority of Jamaica in the Portland Bight area of Jamaica,” said the environmental report.

It adds that the facility will accommodate a floating storage unit or FSU vessel for LNG storage and a LNG carrier delivering gas to the FSU. The platform would contain equipment to regasify LNG as well as related process and safety equipment.

“The liquid gas from the FSU would be carefully regasified and the gas would then be released into an undersea pipeline which will be mostly directionally drilled in basically a straight line from the platform to the vicinity of the JPS plant,” stated the EIA, which adds that the pipeline, at some five kilometres in length, would connect to the JPS gas power plant on shore.

“In addition, the project will construct a new, or refurbish an existing, automotive diesel oil line from storage tanks to the renovated power plant in order to enhance the reliability of the facility in case of LNG delivery interruptions.”

The marine terminal will be constructed offshore in the western side of Portland Bight, at a distance about 200 metres from the shipping channel to Port Esquivel in approximately 14 metre of water depth. “This location offers sufficient depth to berth the FSU and the LNG carrier vessels without the need for dredging, yet has sufficient protection from storm wave impacts as a result of the shape of the Bight,” stated the report.

Energy Policy

NFE is expected to supply JPS as well as potential future industrial users with natural gas. The main objective is to provide the Jamaica Public Service Company’s Old Harbour Plant with a cleaner and more cost-effective fuel in furtherance of the goals of the National Energy Policy.

NFE will conduct the project through its NFE South Holding and with the sponsorship of Fortress Investment Group, a global asset management firm with approximately US$70.64 billion of assets under management and an experienced investor in transportation, infrastructure and energy assets around the world, the environmental report said.

The annual fuel savings from the project is projected at US$74.2 million which represents a 38 per cent reduction in cost. The report adds that, assuming a 75 per cent pass-through to the consumer and a 25 per cent mixed of the generating capacity of the JPS, it will result in a seven per cent reduction is consumer prices. This figure matches the fuel savings published in a separate EIA report on the JPS Old Harbour plant upgrade released in April, as the projects are complementary.

JPS, which has a licence from the Jamaican Government to operate the national electricity grid, is constructing the 190MW plant adjacent to its existing Old Harbour facility in St Catherine, which has the capacity to generate 220MW of power. The current plant will be dismantled once the new one is commissioned.

Gleaner

The JPS has said its protection system failed on Saturday after a problem at the Hunt’s Bay power station which triggered an all-island blackout.

The Jamaica Public Service Company Limited (JPS) says it’s acquiring the services of an independent consultant to evaluate its protection system in the wake of last Saturday’s islandwide blackout.

The disclosure was made by the company’s president and Chief Executive Officer, Kelly Tomblin, during a meeting with energy minister, Andrew Wheatley, yesterday.

The CEO provided an update on the ongoing investigation into the outage, noting that the JPS is already taking several steps to address human error potential and system protection concerns.

Tomblin said the JPS believes an independent protection and system expert can help to evaluate the company’s total protection scheme and make recommendations for operation enhancements, and the level of investment required to meet reliability expectations.

The JPS team also informed that the enhanced protection system, known as ‘Switch on to fault,’ has been restored, while the Company continues to evaluate whether this enhanced system would have prevented Saturday’s outage.

 

IN PHOTO: Kelly Tomblin

The JPS has also committed to involve the energy minister’s team in future grid investment decisions.

Two JPS employees have been suspended pending the outcome of the probe.

The JPS is expected to give a full report on the outage to the Office of Utilities Regulations on September 27.

 

gleaner

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THE Jamaica Public Service Company Limited (JPS) has been given until September 27 to provide a detailed report to the Office of Utilities Regulation (OUR) on Saturday’s islandwide blackout.

A release from the OUR said that,as stipulated in the Electricity Act, 2015, the light and power company is obliged to provide a report to the regulator within 30 days of the date of restoration of power.

The OUR said it will indicate the critical data and other necessary information which should be included in the detailed report on the incident. At the meeting between the OUR and the JPS on Tuesday to discuss the power provider’s preliminary report, the implications of the power outage and the way forward, the regulatory body expressed disappointment with the islandwide power outage, the frequency of such events, and the negative impact on customers.

The OUR urged the JPS to be thorough and rigorous in its investigation and analysis of the incident and requested that they outline corrective measures to safeguard against recurrences, the release said. It added that the JPS has agreed to be guided by the position outlined by the regulator regarding the conduct of its investigation.

Deputy director general of the OUR, Hopeton Heron, said: “Once we have received all the required information from the JPS, the OUR is committed to completing its review of the information as well as its own investigation of the outage, within 30 days. We recognise the significant impact that this islandwide outage has had on customers and so we are committed to exerting all efforts to ensure that we quickly and efficiently do our own analysis and make our recommendations.”

He said, too, that the OUR will be insisting on the conduct of a thorough review of the electricity system including their approach to grid planning, design, installation, operation and maintenance.

Jamaica Observer 

Early indications from the Jamaica Public Service (JPS) have pointed to a breakdown in its protection systems as the most likely cause of the islandwide power outage that occurred over the weekend.

While the company has said that more fulsome investigations into the issue will take time, it has confirmed that the outage was triggered during scheduled maintenance work at the Port Authority of Jamaica (PAJ) substation in Kingston.

“The scheduled work was part of ongoing system improvements being done by JPS to our power delivery (transmission and distribution) network,” Winsome Callum, director of corporate communications at the power company, said in an emailed response to The Gleaner.

Breakdown In Operating Procedures

According to Callum, initial investigations have revealed that there was a breakdown in the implementation of the established operating procedures for the work being done. This, she said, triggered a system fault that led to the outage.

“Preliminary indications are that the first level of the protection system did not operate as expected. As a result, several units at our power plants went offline. The network, in turn, shut down to protect itself from possible damage,” she said in explaining the failure on the protection system.

The protection system is a built-in mechanism on the national grid which is designed to safeguard against procedural errors.

“The protection system is designed to operate at different levels, ranging from isolating areas with a fault all the way up to the ultimate protection being to shut the entire electricity network down in the event of a major system fault,” the power company said.

The electricity supplier has indicated that in the coming days, its investigations will be focused on evaluating why the protection mechanism did not operate as expected.

The power company said it has already taken corrective measures and will be investing in system upgrades to create what it describes as a self-healing grid.

In the meantime, the Office of Utilities Regulation will today meet with executives of the JPS to discuss details of the ongoing investigations into the power outage.

The utility regulator wrote to the company yesterday requesting a preliminary report into the incident.

Callum confirmed that Energy Minister Dr Andrew Wheatley was provided with a preliminary overview on the outage and was to receive an initial report yesterday.

Gleaner

As investigations continue into the power outage that blanketed the entire island on Saturday evening, chief executive officer (CEO) of the Jamaica Public Service Company (JPS) Kelly Tomblin has promised to be open and transparent with the public about the findings of the probe.

“The only thing I know for sure is that the process was not followed one hundred per cent. I don’t know completely why that resulted in a system-wide outage. That is what my team is working on today, and that is what we are going to continue to talk to the press about. We have nothing to hide,” she said in an interview with The Gleaner yesterday.

Jamaica’s sole power distribution company said the outage was caused by a “procedural error, which resulted in a number of generating units going off-line simultaneously”.

In a release to the media, the electricity supplier said it has started its investigations and would provide further details on the cause of the outage today.

Minister of Science, Energy and Technology Dr Andrew Wheatley was swift in expressing displeasure with JPS because of the blackout.

“Let me categorically state that I am not at all happy with this latest incident and I find the inconvenience to the people of Jamaica and the many businesses affected totally unacceptable,” he said in a statement.

CATASTROPHIC FAILURE

Arguing that “islandwide power outages of this nature should not occur as there ought to be processes, procedures, and adequate redundancies in the grid to mitigate such a cascading set of events that would result in a catastrophic failure of this kind”, Wheatley said that he has requested that JPS submit a preliminary report on the cause of the blackout to his office today and a full report by Thursday.

Tomblin indicated that she was having numerous meetings with her technical team and was in the process of preparing a preliminary report to be submitted to Wheatley.

The JPS CEO was forthright in shedding light on the nature of the “procedural error”, which is believed to have caused the outage. She explained that the company’s technical team was still working to put together a more fulsome analysis of the outage.

“We know there was an operational error, but that does not explain something else, which will take some time to figure out. It looks as though there was a technical procedure done on the Hunts Bay station that was not completed one hundred per cent according to process, but that should not have resulted in the collapse of the system, so we have to look to see if it’s a design or engineering issue, but I don’t want to jump the gun and give inaccurate information at this stage,” she said.

In April, the country was also plunged into an islandwide power blackout. The light and power company later said that that outage was caused by problems because of work that was being done on two major power lines in the Three Miles area of Kingston.

Gleaner

Screen Shot 2016-08-23 at 15.28.29

Malvern, St Elizabeth — Eighteen months after ground was broken, the 36.3-megawatt wind farm run by BMR Jamaica Wind at Potsdam, Malvern, high in the Santa Cruz Mountains, was formally commissioned in mid-August.

Priced at US$89.9 million, the wind project, located across the road from another wind farm run by light and power company Jamaica Public Service Company (JPS), is being described as the single largest investment in St Elizabeth since construction of the Alpart alumina plant at Nain in the late 1960s.

The BMR project includes eleven wind turbines, which will provide energy to JPS’s national grid at US12.9 cents per kilowatt-hour.

BMR Jamaica Wind is a subsidiary of US-based BMR Energy. Guests at the recent formal commissioning were told that billionaire British investor, Sir Richard Branson — who turned up for the commissioning — was in the process of acquiring BMR through his wide- ranging and far-flung Virgin Group.

Branson, who triggered laughter by ripping up and throwing away what he said were his speaking notes, told his audience that his motive for the acquisition was to promote a clean energy revolution.

“I decided recently that we needed to get one or two core (clean energy) companies under our belt so that we can actually get out there and speed up this revolution …” he said.

“ We were delighted to acquire BMR and we will be out there trying to hustle and bustle governments all over the Caribbean and other countries to hurry up towards carbon neutrality by 2050. Personally, I don’t need to make money out of it, if it makes a bit of money, fine; if it doesn’t, fine. I just want to get the wind out there get the solar out there, … be powered by sun, wind, sea… a green energy revolution and bring the cost of energy down for everybody; get rid of the dangers of coal and oil and the dirty energies that we are using today… ” said Branson, founder of the Virgin Group.

Funding for the BMR project in Malvern was sourced through a package including a US$42-million loan from the US quasi-government investment agency Overseas Private Investment Corporation (OPIC), which pushes US overseas investment globally; US$10 million from the International Finance Corporation (IFC), which promotes private sector development; US$10 million from the IFC-Canada Climate Change Programme and equity investment of US$26.9 million from BMR Energy.

Jamaica’s energy minister Andrew Wheatley said the BMR wind farm formed part of the government’s drive to significantly reduce reliance on fossil fuels and reduce the current annual oil bill of about US$2 billion. Ninety-two per cent of Jamaica’s energy needs are currently met by oil imports, he said.

The project was in line with the target of 30 per cent renewables in the national energy mix by 2030, as stated in the National Energy Policy, and in keeping with Vision 2030 Jamaica, the minister said.

“Projects like BMR continue to establish Jamaica as a clear renewables market leader within the Caribbean. By the end of this year, we would have added 80 MW of renewable energy to the national grid, through Wigton III (a wind farm at Rose Hill in southern Manchester), Content Solar (solar plant in Clarendon), and this facility,” Wheatley said.

Bruce Levy, president of BMR Energy, said the company had plans to expand the wind farm at Malvern by an additional three wind turbines. Small farmers would co-exist with the energy-generating operations, he said.

Jamaica Observer