TEF reverses course on convention centre share purchase - Ploughs ahead with other projects
Published:Monday | November 26, 2018 | 12:00 AM
Minister of Tourism Edmund Bartlett said Wednesday that spending hiccups arising from the merger of tourism entities under his portfolio have been resolved.
The Tourism Enhancement Fund, TEF, for example, which originally collected airline and other fees, from which its operations were previously directly financed, now gets central government subventions for its projects.
Bartlett said the hiccups would have been "more operational from the point of view of changing out accounts and putting in mechanisms for direct reporting to the accountant general", as well as overhangs from projects that TEF committed to finance, going back five years or more, that needed to be cleared.
"One of them was cancer equipment for CRH [Cornwall Regional Hospital] which was commissioned in the past week. The commitment was made from around 2012," the minister said.
He noted that the MOT now runs a budget of nearly $12 billion with all affiliated tourism entities merged, including TEF.
The TEF itself disclosed in its newly released annual report for the fiscal period ending March 2018, that a plan for it to acquire shares in the Montego Bay Convention Centre on behalf of the Ministry of Tourism was scuttled, and those shares were vested instead in the accountant general.
Bartlett confirmed that his ministry had sought to acquire the one-fifth stake held by the Urban Development Corporation in the asset via a purchase of shares.
"The convention centre is a budget item now, a department in the MOT. We no longer need to buy shares or anything like that," he said, while noting that it was referenced in the TEF report because those discussions had been held.
"The UDC and the Ministry of Finance were the joint owners, the UDC with just over 20 per cent and the MOFP with over 70 per cent. We were buying the UDC shares - buying them out. But now we don't need to do that again because everything belongs to the Consolidated Fund," Bartlett said.
The convention centre's financial performance has been an issue since its construction, but Bartlett said its losses over the past two and a half years were "reduced to just about US$500,000, coming down from US$2 million annually".
He now calls the convention a "success case" since its takeover by the tourism ministry.
TEF Executive Director Dr Carey Wallace otherwise indicated in the agency's annual report that despite losing direct control of its funding, the agency has been able to stick to major projects, including continued spend on shovel-ready investment projects and the upgrade of major cruise destinations.
Before the 2017 amendment of the Tourism Enhancement Act, the TEF's function included collecting the enhancement fee paid by cruise and airline passengers visiting Jamaica; approving and monitoring the implementation of tourism projects and programmes; administering the assets and investing the monies of the fund.
Now, however, spending is done under the "classical method of government spending" through allocations from the Consolidated Fund. For the fiscal year just ended, TEF's project expenditure was $2.4 billion, which was in line with its budget.
For the fiscal year ending March 2018, inflows to the Consolidated Fund from TEF fees totalled $6.7 billion, up from $5.93 billion in fiscal 2017. Cruise fees accounted for just $154 million of the total inflows in the review period, up from $142.8 million the year before.
Wallace noted that actual airline revenues were above budget by 7.3 per cent and cruise revenues by 21 per cent.
Still, the TEF report said the agency initially "grappled with achieving a balance between monthly warrants for funding requested from the Ministry of Finance and the Public Service submitted through the portfolio", but that new protocols were eventually put in place.
For 2019 and beyond, TEF will be backing projects related to the pension scheme being developed for tourism workers, human resource development and data mining.