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UDC eyes break-even after two years of losses

Published:Wednesday | February 25, 2015 | 12:00 AM

General Manager of the Urban Development Corporation (UDC) Desmond Malcolm said Friday that the state agency was on track to break even as March 31 nears, following two years of losses.

The expected move out of negative territory follows improvements in the company's position last year.

Malcolm said that for financial year ending March 2014, the UDC moved from an operating loss of $721.26 million to a net operating loss of $184.703 million "representing tremendous positive turnaround of $536.56 million".

For the current period, the UDC is still "focused on breaking even and improving its profitability going forward through the pursuit of major projects in its designated areas", he said.

Within the last two years, the corporation has disclosed large losses related to the construction of the Montego Bay Convention Centre.

The UDC is yet to provide annual reports for the periods, but an operational review completed in 2013 by the Auditor General said that of the corporation's several subsidiaries, only the St Ann Development Company (SADCo) shows consistent positive trend in its financial operations over the period.

SADCo-managed operations shows that all, except for the Dunn's River attraction, incurred accumulated losses of $675.5 million over the last six years, from fiscal 2007 to fiscal 2012.

The review noted that the positive gains from the Dunn's River operation was used to offset the operating expenses of the other 18 loss-making operations, which include seven staff apartments at Fisherman's Point, Turtle Towers Beach and Sandcastles Resorts.

The Auditor General knocked the corporation for its receivable management system, saying it "has proven to be ineffective", resulting in impairments or $973 million at May 2012, or 72 per cent of its total receivables balance of $1.3 billion.

The Auditor General also found that of 116 properties leased to both Government and private tenants, only 47 of the lease agreements were current, 46 were expired, and there were no formal agreements for the other 23.