PM blames PNP for exposing Petrojam to fiscal risk

PM blames PNP for exposing Petrojam to fiscal risk

Port Authority opens new 6,300-square-foot BPO facility in Montego Bay

Observer staff reporter

Thursday, January 10, 2019

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MONTEGO BAY, St James — Prime Minister Andrew Holness has blamed the previous People's National Party (PNP) administration's lack of foresight for not anticipating the inevitable fiscal risk to which Petrojam would be exposed after losing their largest customer — the Jamaica Public Service (JPS) — following the introduction of liquid natural gas (LNG).

“In its present state, Petrojam is a fiscal risk to the Government. The truth is, after JPS ceased to be its major customer by virtue of a decision that the Government made to diversify its fuel mix to include LNG, which is a more stable fuel in terms of its commodity pricing and probably better in the long run for Jamaica and a more efficient fuel from an environmental position. We (Government) took that decision. When we took that decision we should have also considered the other impacts of that decision, which means that Petrojam would lose 50 per cent of its customer [base]. That could very well mean that the operations of Petrojam could become a call on the Government,” Holness argued.

“I used the term Government but I shouldn't because in the consciousness of Jamaica, Jamaican people see the Government as separate from them, which is not the case. Government is just the accumulation of you. So it is a call on the Government's purse; Government is a collection from your pocket. And that's what it is. Is it is going to be a call on your pockets?”

He added: “Government must always be forward-looking and in that forward-looking stance the Government must see what are the risks that are on the horizon for our fiscal certainty.”

Minister of Foreign Affairs and Foreign Trade Senator Kamina Johnson Smith announced Tuesday that the Government will be taking legislative action to take ownership of the 49 per cent share in Petrojam that is held by Venezuelan state-owned oil and natural gas company, PDV Caribe.

PNP spokesman on energy, Phillip Paulwell, however, said the Opposition is against what he termed the hostile takeover of Venezuela's shares in Petrojam.

But the prime minister declared yesterday that “those who are critical of the Government now should explain why we are happening upon situations that are creating fiscal risks for the Government.

“This Government is giving the people of Jamaica the commitment that we will not just manage the situations that exist now, but we are managing the situations to come and you can be assured that the Government I lead will always make decisions in the interest of the Jamaican people first,” Holness stated.

“...I am not running a Government that is under sea, not knowing what is coming in the future as we have had Governments do in the past. And then we happen upon situations.”

He was speaking at the official opening of a new 6,300-square-foot BPO building in Montego Bay, St James yesterday.

The facility was constructed by The Port Authority of Jamaica in the Montego Bay Free Zone (MBFZ).

According to Professor Gordon Shirley, chairman of The Port Authority, construction of the building has increased BP- type space within the freezone by 10 per cent.

It also facilitates, he said, diversification of BPO services and Jamaica's near-shore opportunities to leverage Jamaica's position in the international BPO market, and increases The Port Authority's lease/rental income, creates opportunities for about 1,500 new jobs, when fully occupied, improve the aesthetic appeal of the campus and improve the working environment for BPO workers by raising the bar for BPO-designed facilities and provides employment for tertiary graduates in supervisory, operations, facilities and project management, among other things.

On the second floor, three quarters of the building has been built out and occupied by Unique Vacations Ltd (UVL), the support centre for Sandals and Beaches Resorts. This facility has provided UVL with a space to expand its services and one that appropriately represents the diverse and high net worth portfolio within its business line. UVL currently employs 205 agents, providing a wide range of travel and sales services for the brands.

The building is occupied on the lower floor by Concentrix, a publicly traded US-based operation. Concentrix is the second-largest global provider of customer engagement services, having recently acquired Convergys. The new combined Concentrix organisation provides services in more than 70 languages from approximately 275 locations in 40-plus countries across six continents.

Concentrix opened its first Jamaican centre within the MBFZ and has since expanded into Kingston, with a total employment locally of 471 as at December 2018.

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