The Government shaved another $1.6 billion off its capital budget for the remainder of this fiscal year.

At $37.2 billion, public sector capital spending will be $500 million less than in the previous fiscal year, without accounting for inflation and devaluation of the Jamaican dollar.

The latest reductions follow a December announcement that $6.7 billion in savings on interest payments would be realised for the year that runs to March 31.

It also means that cuts will be deeper than the $5.9-billion decrease in capital expenditure and the $1.1- billion reduction in recurrent programme spending that was announced a little over two months ago, as part of measures to close a huge gap created by a revenue shortfall.

Supplementary estimates tabled in Parliament this week showed that the Government expects a further $3.4 billion in savings on interest payments and plans to cut spending on programmes by another $1 billion.

It will end up forking out $700 million more on interest costs because the Jamaican dollar is weaker than it was expected to be, but by the end of March it will have also paid out more than $11 billion less than was budgeted for interest payments at the beginning of the year, primarily due to lower-than-expected National Debt Exchange (NDX) finalisation costs and lower loan-raising expenses.

Salary arrears, one-off payments to public sector workers and a reclassification exercise for teachers and health-care workers were paid out to the tune of $17.1 billion, but a $1.8-billion reduction in public sector pension payments means lower overall spending on programmes for the curent fiscal year.

The pension allocation was made to facilitate payments to persons employed in former departments of the Ministry of Finance and Planning — Customs, Inland Revenue, Taxpayer Audit and Assessment and Tax Administration Jamaica (TAJ), a semi-autonomous revenue authority (SARA), and the Jamaica Customs Agency (JCA), an executive agency.

But no payouts were made during 2013/2014, due to administrative delays.

In terms of the capital budget, the Government cut its grant to the Student Loan Bureau by $1.6 billion for the fiscal year, due to lower-than- projected intake from the Education Tax.

But the Major Infrastructure for Development Programme (MIDP) saw an even bigger reduction of $2.1 billion, because the Government was slow to meet the conditions precedent to the loan from the Chinese government.

Another $600 million was cut from the budget for road rehabilitation, while spending on the Jamaica Development Infrastructure Programme was cut by $360 million for the fiscal year, even though the budget for the Jamaica Emergency Employment Programme (JEEP) was increased from $740 million to $1.04 billion.

Other cuts to capital projects include: a $92-million budget reduction for an undertaking to relocate earth drains and coastal revetment, due to incomplete negotiations between the Ministry of Foreign Affairs and Foreign Trade and the local consultants; a $179- million cut on the construction of a second campus for the Anchovy High School, also due to delays in implementation; and a $127-million decrease in spending at the University of Technology, as a result of delays in the construction of shared facilities and administrative building.

Slow to procure the services of contractors to replace inefficient air-conditioning units in selected public buildings, the Government’s sluggishness on implementing the energy-efficiency and conservation loan programme also reduces the capital budget by a further $132 million this fiscal year.

The e-Learning project also took a $310 million hit to its budget. However, the Government made room for additional spending of $143 million for the Tablets in Schools project.