Business

Gov't expects $1B reduction in deficit of Self-Financed Public Bodies

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Sunday, May 13, 2018

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Self-Financed Public Bodies (SFPBs) are expected to reach an overall balance deficit of $10.3 billion for financial year (FY) 2018/19.

This compares with an estimated balance deficit for FY 2017/18 which is projected at $11.3 billion.

This was disclosed by the Ministry of Finance and the Public Service in a presentation to the House of Representatives' Public Administration and Appropriations Committee (PAAC) on Wednesday at Gordon House.

The reduced overall balance is predicated primarily on increased capital expenditure, as the entities pursue several developmental programmes, the ministry's presentation said.

Capital expenditure is projected at $68.3 billion, compared to $51.5 billion in 2017/18.

Four of the SFPBs, namely the National Housing Trust (NHT) ($33.5 billion), National Water Commission (NWC) ($6.6 billion), the Port Authority of Jamaica (PAJ) ($6.8 billion) and Petrojam at $7.9 billion are expected to account for bulk or 80 per cent of the planned expenditure.

The ministry says that the NHT will continue to pursue increased delivery of housing solutions in the medium term.

The NHT is currently employing several new strategies aimed at making housing solutions more affordable and accessible. Accordingly, 16,356 solutions (houses and residential lots) should be completed by 2020/21, of which 4,734 are scheduled for completion in 2018/19.

The NHT projects to expend $31.5 billion during 2018/19, in pursuit of these objectives. This should account for 94 per cent of its budgeted total capital spend.

The NWC will continue the implementation of selected programmes expected to: reduce the level of non-revenue water (NRW); achieve energy and other efficiency gains, contain operating costs and enhance revenues.

Capital expenditure of $6.6 billion includes financing for the KMA Water Supply Improvement project, as well as rehabilitation works under the K-factor programme.

Petrojam plans to undertake activities during 2018/19 aimed at enhancing its refinery capabilities, whilst improving marketability and containing costs.

Petrojam will pursue commencement of construction for a Vacuum Distillation Unit (VDU), which is Phase 1 of the refinery upgrade programme, and which will facilitate the production of asphalt.

Funds will also be expended for new subsea pipelines and the repair of tank structures.

The PAJ's development projects are strategically aligned to the Government's growth and employment agenda.

The PAJ will continue to pursue several developmental activities, including the Montego Bay cruise and cargo development, and acquisition of a Sea Walk Floating Pier for use at Port Royal.

The PAJ, in 2017/18, placed significant focus on completing Business Process Outsourcing (BPO) facilities in Portmore and Montego Bay, as part of efforts to develop and expand Jamaica's outsourcing industry.

The Montego Bay facility has been completed, and construction of the Portmore facility is to be completed in 2018/19. Development projects are expected to account for over 80 per cent of the planned capital expenditure of $6.8 billion.

Net flows from Public Bodies to Central Government for 2018/19 were projected at $57.3 billion, resulting from transfers of $71.4 to the Government of Jamaica (GOJ) and transfers of $14,142.3mn from the GOJ.

The flows from SFPBs to GOJ include SCT from Petrojam Limited, corporate taxes, grants to support special programmes as well as financial distributions.

Flows from the Central Government to SFPBs for FY 2018/2019, include the Students' Loan Bureau (SLB), support from Education Tax; the JUTC, support for acquisition of spare parts and fare subsidy; and the NHT (employer's contribution arrears).

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