Thu | Oct 17, 2019

Fayval Williams | More light on PCJ wind-up

Published:Sunday | September 22, 2019 | 12:34 AM
Fayval Williams

Your editorial ‘Wrong lesson being applied at PCJ?’ (Gleaner, Tuesday, September 17, 2019) positions the decision to wind up the Petroleum Corporation of Jamaica (PCJ) Group within the context of management and policy failures at both PCJ and Petrojam. The Ministry of Science, Energy and Technology wishes to set the record straight.

The Cabinet made an informed decision to change the institutional arrangement for the PCJ, Petrojam Ethanol Limited and Jamaica Aircraft Refuelling Services, in keeping with the 2017 Cabinet-approved rationalisation plan for the reintegration of eligible public bodies into central Government, as well as mergers and closures.

The plan envisages select public bodies to be rationalised, either by way of integration/reintegration into central Government as divisions, departments, etc, within ministries; mergers with other public bodies where synergies of resources and functions have been identified; or closures, where deemed appropriate. It is expected that the rationalisation will:

- Lead to a more efficient, effective and accountable public bodies sector.

- Consolidate and decrease the number of public bodies in operation to reduce bureaucracy and the cost of government.

- Strengthen and focus the governance and oversight arrangements that will lead to improved efficiency and accountability.

Under this ministry, several entities are slated for change, the implementation of which is advanced in some instances. These entities include:

- National Energy Solutions Limited (NESoL) – which will be wound up and some of its functions brought under MSET. This will allow the ministry to develop a comprehensive plan to bring energy solutions to those marginalised communities in need of proper house wiring and street lighting.

- The Board of Examiners and the Government Electrical Inspectorate – which will be wound up and a new division, Government Electrical Regulator, created within the ministry in keeping with the Electricity Act 2015. This will allow more electrical inspectors to become available to accelerate the pace with which Jamaicans get electricity.

- The Office of the Chief Information Officer, which will be merged with e-Gov Jamaica Limited, to create a new Information and Communication Technology (ICT) Authority. This entity will accelerate the pace of implementation of the Government’s ICT infrastructure, making the State more efficient and accessible.

Objective assessment

As far as the winding up of the PCJ is concerned, public discourse must include an objective assessment of its role in a sector that has changed since the entity was established in the 1970s. Therefore, the article’s point of departure in examining the importance of the PCJ represents a throwback to a time when the country’s capacity to respond to developments on the global energy landscape was undeveloped. The following observations are worth considering:

- The PCJ is largely involved in project management and procurement, especially of third parties to implement energy-efficient solutions;

- All of the policy, regulatory and strategic frameworks that underpin the development of the energy sector have been developed by the ministry, including: the Vision 2030 related goal; national outcomes and national strategies; the Integrated Resource Plan (IRP); the 20-year Electricity Generation Plan and the 2010 National Energy Policy.

- The ministry is leading the effort to develop the enabling environment for a robust and environmentally sustainable energy sector.

- The significant work that is required to move the energy sector forward includes the development of energy sector sub-policies such as: waste to energy, electric vehicles and the Electric Vehicle Mobility Strategic Framework, and development of the Third National Energy Action Plan (NEAP III), which are being led by ministry expertise.

- The opening up of the energy sector and the participation of more players requiring a greater focus on establishing policy, regulatory and monitoring and evaluation frameworks which are the ministry’s core functions.

There is a strong argument to be made for appropriating the technical expertise at the PCJ into the ministry, which is expected to benefit the country in a number of ways, including:

1. Allowing the ministry to have a more comprehensive grasp of the energy sector.

2. Providing more cohesion in the development of sector policies and plans.

3. Creating a stable and sustainable environment that allows for the shaping of the long-term landscape for the sector.

4. Presenting an opportunity for policy and technical expertise to be nurtured and developed and focused on the implementation of the National Energy Policy.

Interestingly, the article contends that the decision to “collapse the PCJ operations into central ministry … is fraught … ”, but the arguments presented to support this position cannot withstand scrutiny. Here is why:

1. Evidence has shown that entities disaggregated from central ministries are more prone to “ministerial sway”;

2. Highly technical staff work in central ministries – engineers, doctors, architects, surveyors, economists, etc – and their skills and competencies provide an important nexus between policy and technical; and,

3. Businesses, including foreign firms, are accustomed to negotiating the contours of central ministries. In fact, very often, public bodies rely on the expertise of ministries to shape complex partnership agreements and joint ventures;

4. A preponderance of evidence establishes the problematic issue of governance as the Achilles heel of public bodies in Jamaica weakens the parting jab at the state of transparency in central ministries.

Of little notice is the underutilised assets on the PCJ’s balance sheet. This wind-up allows the assets to be released to central Government to be utilised in critical areas.

Finally, the ministry welcomes public discourse on the restructuring of its entities and commits to an open and transparent approach.

- Fayval Williams is minister of science, energy and technology. Email feedback to columns@gleanerjm.com.