House approves withdrawal from Capital Development Fund

The House of Representatives has approved the withdrawal of $282 million from the Capital Development Fund (CDF) to provide budgetary support to the Jamaica Bauxite Institute (JBI) for the 2023/24 financial year.

It is also proposed that a withdrawal be made from the Fund for the payment of outstanding management fees of $2.5 million to the Development Bank of Jamaica (DBJ).

The withdrawal was approved on Tuesday in the absence of Opposition members of the House, who had walked out of the sitting earlier in protest of Speaker Marisa Dalrymple-Philibert's handling of an Integrity Commission report relating to her.

Minister of Finance and the Public Service, Dr Nigel Clarke, informed that the budgetary support to the JBI is expected to cover 70 per cent of the entity's operating expenditure of $402 million.

The remaining 30 per cent is anticipated to be funded from other income and reserves.

“The JBI has been granted budgetary support totalling $1.225 billion from the CDF over the five-year period, 2018/19 to 2022/23,” Clarke said.

The JBI was established by the Government in 1975 as a regulatory planning and development agency, to manage the sovereign aspects of the Government's participation in the bauxite alumina industry.

It is responsible for monitoring and studying the alumina sector and advising the Government on matters pertaining to the industry, locally and internationally.

Turning to the payment of outstanding management fees to the DBJ, Clarke explained that this is for the periods 2017/18 to 2021/22.

The $500,000 per-year fee was established in 1993 and has remained unchanged, he noted.

He further informed that Cabinet has approved the appointment of the managing committee, chaired by Financial Secretary, Darlene Morrison, which is expected to provide additional oversight of the CDF.

The CDF was established under the Bauxite Production and Levy Act. It was promulgated in 1974 at the time when the bauxite production levy was imposed and the proceeds of the levy directed to the Fund.

Clarke told the House that the CDF balance has gradually increased over the last five years, given the expiration of waivers on the bauxite levy on April 1, 2018, with the Fund receiving inflows totalling $4.865 billion during the five-year period to 2022/23.

During financial year 2021/22, the outstanding bauxite levy of $2.481 billion was remitted by UC Rusal Jamaica Limited for December 2018 and 2019, contributing to the significant increase in the CDF balance from $1.677 billion as at March 2021 to $4.9 billion as at March 31, 2023.

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