The $5 billion which the Government has siphoned from the National Housing Trust (NHT) for its Education Transformation Programme has left the agency with a deficit of $1.9 billion for the fiscal year ended March 31, 2006.
The NHT's 2005/06 annual report and financial statements tabled in Parliament this week show that had the $5-billion been left in the housing agency, it would have ended the March 2005 - March 2006 year with a surplus of $3 billion.

But even though the withdrawal has left the NHT bleeding red ink, the agency's management says there is no need to worry as the NHT has assets of over $78 billion for the 2005/2006 period compared to the $72-billion in assets held during 2004/2005.

Against objections from the Opposition, the Government last year used its parliamentary majority to amend the NHT Act, allowing the administration to withdraw money from the NHT to fund its ambitious Education Transformation Programme.

The Observer was unable to contact NHT officials for comment yesterday. However, Radio Jamaica (RJR) quoted Hugh Reid, the Trust's senior general manager in charge of finance and operations, as saying that the NHT was not surprised by the deficit.

"In the run-up to our making this particular contribution, the NHT did various financial projections to ensure that the contributions to the Education Transformation Project would not affect the financial viability of the NHT going forward," RJR quoted Reid.

In terms of loans, the NHT booked $49.7 billion for the period ended March 2006. Operating income, earned mainly from loan repayments and investments, came in at $6.65 billion. Operating and other expenses for the year under review were $3.3 billion, which included staff costs of $1.25 billion.

The education grant isn't the only social engineering project that the NHT has embarked on. The Inner-City Housing Project (ICHP), started in 2004, is one such project. The aim is to "transform inner-city areas into attractive and sustainable neighbourhoods through a combination of new housing and the refurbishment of existing stock", the financial statements said.

The Trust has committed $14.7 billion to the project that is scheduled to be completed in 2011. The NHT expects to spend the money in the following manner:

. The construction of 5,000 housing solutions of two and three bedroom units at a cost of $9.409 billion.

. The provision of supporting social and physical infrastructure for new and existing communities at a cost of $2.530 billion.

. The provision of professional fees and indirect costs totalling $2.2 billion.

. The refurbishing of inner-city communities at a cost of $560 million.

"It is expected that the Trust will. recoup the balance of the investment through the granting of mortgages," said the NHT report.

For the 2005/2006 period, the NHT also provided special subsidies and grants to the Social Housing Programme at a cost of $150 million; Relocation 2000 at a cost of $30.8 million and spent $43 million on Emancipation Park. The Office of National Reconstruction received $65 million.

Other commitments that the NHT has undertaken for the 2005/2006 period include:

. $6.45 billion for financing house construction and acquisition of houses for allocation to beneficiaries.

. $63 million for the purchase of land.

. $2.7 billion for loans and/or mortgage financing.

. $132.5 million for a car park at the NHT head office.

. $2.74 for the ICHP.

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