Henry insists no breach of Road Maintenance Fund Act

BY INGRID BROWN Sunday Observer senior reporter browni@jamaicaobserver.com

Sunday, September 05, 2010

TRANSPORT Minister Mike Henry is insisting his ministry did not breach the Road Maintenance Fund Act as indicated in Auditor General Pamela Monroe-Ellis’ recent report.

According to Henry, it was necessary to use the money to pay for critical road work for which funding was no longer available following the suspension of Capital A funding from the finance ministry to his ministry.

“The final analysis for the layman on the ground is, if money is meant for roads and it is spent on the road I don’t know what breach I am committing, but maybe we don’t want roads but money to be piled up in the accounts, don’t pay the contractors, allow the contractors to sue us,” Henry told the Sunday Observer.

The Auditor General’s report found that Government breached the Road Maintenance Fund Act by unilaterally changing provisions of the Act without Parliamentary approval. It also said that some $761 million was diverted to the National Works Agency (NWA) in breach of the Appropriations Act.

But Henry said he fully intends to address the matter when Parliament resumes later this month.

In the interim, he maintained that there were no breaches as the money was spent on critical road works to address the gap between the International Monetary Fund and the lack of Capital A funding which is no longer a part of his ministry’s budget.

The Auditor General’s report also cited concerns with the lack of independence of the Road Maintenance Fund Board in administering the fund that was set up to rehabilitate the nation’s roads.

The findings were unveiled in an audit report, which the Opposition spokesman on finance Dr Omar Davies asked the Auditor General to carry out after failing to get answers on how the funds are being used.

The audit of the Road Maintenance Fund was carried out to determine if all the funds that should be paid into it were indeed paid over and whether withdrawals and expenditures were in accordance with the provisions of the Road Maintenance Fund Act.

But after careful assessment, the auditor general said she found that there were breaches of the Act.

The breaches related to how much of the $8.75 increase in the Special Consumption Tax (SCT) on gasoline was to go into the fund.

Finance Minister Audley Shaw in April 2009 said that in the first year 20 per cent of the increase in the SCT would go into the fund in the 2009/2010 fiscal year and 35 per cent in the current fiscal year.

If those percentages were realised, it would have meant $1.9 billion should have gone into the fund between April 2009 and June of this year.

However, only $1.67 billion from the SCT was actually remitted to the fund, representing a $235 million shortfall.

The auditor general said the reason behind the shortfall was the Government’s breach of a provision in the Road Maintenance Fund Act.

Monroe-Ellis said Cabinet breached the Road Maintenance Fund Act when it decided to continue to pay over 20 per cent of the increased SCT on fuel in this fiscal year to the fund, rather than increasing it to the 35 per cent the finance minister said it would deposit in the second year.

Such a decision, the report stated, should have been made by Parliament and not Cabinet.

Meanwhile, Patrick Wong chief executive officer of the NWA, also defended his agency’s use of the Road Maintenance Fund money.

Wong explained that the ministry had a Capital A budget for which was approved a number of road works. However, this Capital A budget was terminated in August, leaving a number of incomplete projects which were being executed by that agency.

“These works could not be left unprotected and so they had to be taken to a stage where we could protect the investment already made by the ministry,” he told the Sunday Observer.

He explained further that some of these projects include the river training of the Rio Cobre which protected the major investment of the Soapberry Sewage ponds as well as the Mandela Highway.

“There was less than three feet of the Dyke road... another heavy surge from the Rio Cobre would have taken out the Dyke which would have flooded out the Mandela Highway from Six Miles to Ferry,” he said.

According to Wong, most of what was being done were emergency works which would have been funded by the ministry’s Capital A programme.

“These are all road-related activities... all items of work spent under these funds are totally accounted for and certified to be in accordance with the specifications,” he added.

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COMMENTS (7)

Wharf Dawg
9/5/2010

This is unbelievable!! Are you sure the Minister actually said that?
He unilaterally changed an Act of Parliament and said it was not a breach? The arrogance of the JLP knows no limit!!
So Mike Henry why stop at that? Why not make yourself and your party government for life and inform us , say,, in 2020??
What you have done sir is set a precedent that someday we will rue!! Sir you might not be around then to see your baby in full bloom, but my children will.
Narcissism at its best !!!

Sean H.
9/5/2010

... breach or not aside ...
How come all of y'all critics kept your mouths shut when the same roads were not being maintained at all? A convenient case of hear / see no evil!!!
@george watson - your argument is foolish. Age is not the issue, competence is! The young Spencer is a good counter to your argument.

Chuck Emanuel
9/5/2010

These People will never learn unless they are vigourously held accountable and kicked out of Governance. These are some of the ways where the Laws of the State are circumvented and unidentified entities, or Criminals are given contracts under the guise of "fixing roads".
These People must be held accountable !.

Duncan Bertram
9/5/2010

Breach is breach. Henry believes he can do what he likes without going to parliament. What if every minister was doing that? ah oh, they might be doing the same thing! Jamaica's affairs are being handled like a hardware store or gas station that went bankrupt.

christopher Isaacs
9/5/2010

Such a well read and eloquent individual as Mike Henry should know that this is not just about misappropriation of funds but rather that the necessary bureaucracy was not followed. Offices like those of the AG and the CG did not create themselves, they are creatures of parliament. Members of parliament had gone out of their way to install these necessary humbug, but then complain of it's consequences and manifestations. Critical and necessary are infantile arguments Mr Henry! Follow the rules.

george watson
9/5/2010

This minister, by his actions over the recent past justifies the call people are making for old men in politics to stand down. This old man is so arrogant that when asked a question goes on and on without even giving the interviewer time to ask another and by his answer seems to be saying, "Who are you to question what I do?"
Perhaps the minister is preoccupied with things that should be the preserve of younger people who have the necessary stamina.
He wants to have his cake and eat it too.

george watson
9/5/2010

This government continues to breach protocols and procedures and when caught try to justify their actions with some flimsy excuse. The minister is saying that the money was needed for critical road works but when has not all road works in Jamaica been critical? Some roads have not been touched since Independence. We will soon hear from them that the actions of the auditor general are political. That is what they always say when they are asked to account for their actions, or criticized.
The minister’s explanation is like the motorist explaining to the magistrate that he went through the red light because there were no vehicles coming in either direction. And he was late for his appointment. Until these men are made to pay for their actions then we can continue to expect more of the same.

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