Cost of flood damage could be known today
Published:Thursday | May 18, 2017 | 3:22 PM
The cost of the damage associated with flooding caused by heavy rains this week - which destroyed bridges, roads, homes, and crops as well as leaving some rural towns under water - could be known as early as today. The Government says that a comprehensive review of the damage could lead to a preliminary figure on the worth of the damage across 10 parishes.
Based on pronouncements from Local Government Minister Desmond McKenzie, the estimate of the damage is likely to be much higher than the $490 million he said heavy rains in southern and eastern parishes cost the country late last month. Some $550 million has been budgeted this fiscal year for contingency funding.
Never received payout
Lawmakers, however, fear the impact of the cost on the country's fragile economic situation and say that Jamaica may have to review arrangements with the Caribbean Catastrophe Risk Insurance Facility (CCRIF).
Jamaica has been a member since its establishment in 2007, but despite several events, the Government has never benefited because the natural disasters experienced have not qualified for payouts. The facility does not use the assessment of damage but instead uses a model that allows it to estimate the damage based on a pre-defined set of circumstances, Financial Secretary Everton McFarlane explained to the Public Administration and Appropriations Committee on Wednesday.
He added that for the 2015-2016 policy year, Jamaica expanded its coverage from just hurricane, tropical cyclones, and earthquakes to include excess rainfall. For the current 2016-2017 policy year, which started on June 1 and which will end on May 31, Jamaica is paying US$4.9 million in premium, which is the amount after a discount from the full US$6.3 million premium.
"Supposing we did not have this new IMF (International Monetary Fund) agreement, as the Prime Minister called it, for a rainy day to draw down on, what would be the effect on our current budget? And knowing that you're paying this premium for umpteen years and we have been outside of the model that would give us a payout. It begs the question is it worth it?" asked Manchester North Western Member of Parliament Mikael Phillips.
McFarlane said that up to US$28.5 million can be paid out if Jamaica meets the criteria for excess rainfall.
In two weeks, the finance ministry is to provide information on the heavy rainfall in the past month and whether Jamaica will apply to the regional insurance fund.
Since its establishment, the 16-member CCRIF has made 22 payouts totalling US$69 million to 10 governments.