Sun | Sep 24, 2017

Auditor General apologises for misleading on NROCC debt

Published:Friday | November 13, 2015 | 11:00 AM
Auditor General Pamela Monroe Ellis

The auditor general has issued an apology to the National Road Operating and Constructing Company (NROCC) following an error made in a report tabled in Parliament on Tuesday.

Auditor General Pamela Monroe Ellis had asserted that NROCC had racked up a $332-billion debt.

Finance Minister Dr Peter Phillips yesterday said that as of March 2015, NROCC had a long-term liability of $71 billion and not $332 billion.

The Auditor General's Department subsequently issued an apology.

"'The report was submitted in Mrs Monroe Ellis' absence, as she is currently off the island. We have taken note of the error and assure you that we will be issuing a correction and apology to Parliament, Dr Omar Davies, as well as on our website,'" the transport and works ministry said in a statement yesterday, quoting an email it said was received from Monroe Ellis' office.

Transport Minister Dr Omar Davies said while he welcomes the apology, he hopes that no damage will result to the image and reputation of NROCC.

Phillips, meanwhile, said NROCC's $71 billion long-term debt involves US$368 million, which reflects a 2028 bond that is on loan from the PetroCaribe Fund and a $3.55-billion bond which is inflation indexed, and for which there have been various advances.

"These debts are all part of the debt stock and are being serviced by the Government of Jamaica, except for the $3.5-billion bond, which is guaranteed by the Government of Jamaica, but is being serviced by NROCC," Phillips said.

He said that NROCC, which has responsibility for ensuring the implementation of Highway 2000, continues to look at ways to refinance its debts.

"While the financial costs were high, I don't think anybody would deny that Jamaica has received direct benefits from this highway," Phillips said, pointing to lower transportation costs associated with using roads such as the Portmore developmental corridor and the East-West corridor of Highway 2000.

 

DRAFTING OF AMENDMENTS

 

In the meantime, Cabinet has approved proposed amendments and given instructions to the chief parliamentary counsel for the drafting of amendments to the Public Debt Management Act (PDMA) 2012 and its attendant regulations.

The PDMA provides a framework for the better management of the nation's public debt. This is a coherent and comprehensive legislative framework which sets clear objectives for the management of the public debt, with established accountability, reporting requirements and other procedures.

A World Bank review in 2014 made institutional capacity-building recommendations for the more efficient operations of the act. The proposed amendments will also make the PDMA consistent with international and local standards and conform to other pieces of legislation.

The proposed amendments pertain primarily to clarifications and greater details. They include requirements and operations to be put in a place in the event of the assumption of debt of public bodies, and the purposes for which loans may be raised, among others.

The PDMA amendments form part of the Public Financial Management Reform.