Financial woes threaten road repair project
Published:Wednesday | September 29, 2010 | 12:00 AM
Edmond Campbell, Senior Staff Reporter
A SENIOR government technocrat has indicated that the multibillion-dollar road repair and maintenance programme now being rolled out by the Bruce Golding adminis-tration could be scaled down.
While the possible cutback in the project is being attributed to the inability of the Road Maintenance Fund (RMF) to service huge interest costs that will arise from the US$340-million loan, there are new concerns about an additional US$30 million for management fees.
The project, dubbed 'Jamaica Development Infrastructure Programme (JDIP)', will see the Government contributing US$60 million.
Facing the hard-hitting Public Accounts Committee for the second time in two weeks, Financial Secretary Dr Wesley Hughes said the size of the major road-repair programme being implemented over a five-year period could be reduced.
He also suggested that the current 20 per cent allocation to the RMF from the special consumption tax on petrol could be increased to 35 per cent in order to meet loan repayment costs.
Hughes said any decision to reduce the size of the loan from the China Export Import Bank would have to be made by Cabinet.
"It is an option. I am not ruling out that as an option," he stressed.
Pamela Monroe Ellis, auditor general, last week raised concern about the RMF's ability to finance the Chinese loan because of a projected cash-flow problem in year two of the programme. This was set out in a special audit of the RMF by the department.
Management fees
Eyebrows were also raised in Gordon House yesterday when technocrats from the RMF and National Works Agency (NWA) told a parliamentary committee that an additional US$30 million would have to be paid to the two government agencies for manage-ment fees.
Clement Watson, executive director of the RMF, said five per cent and two and a half per cent management fees would be paid to the NWA and the RMF, respectively, from the special consumption tax. This increases the total sum of the JDIP programme to US$430 million.
However, asked about the additional US$30 million in management fees, Hughes said he would seek clarification on the matter.