NWC gets US$50m debt relief
Finance Minister Nigel Clarke has stoutly defended the Government’s decision to pay off a US$50-million debt to the Bank of Nova Scotia on behalf of the National Water Commission (NWC).
Describing the decision as a step in the right direction, Clarke withstood probing questions from members of the parliamentary Opposition, with Mark Golding challenging him that it was not consistent with the Public Debt Management Act.
Addressing Thursday’s sitting of the Standing Finance Committee of Parliament, Clarke declared that as a government-guaranteed debt, it fell into a different category.
But Golding, the opposition leader, insisted that “that’s covered by the Public Debt Management Act”.
Clarke was responding to Golding’s question as to whether, from an accounting perspective, the transaction would represent a loan from central Government to the NWC that would be carried on the commission’s balance sheet as a payable to the State.
Clarke was firm in his response.
“It represents a reduction in the liabilities of the NWC, and so the benefit of that to the NWC is that they will have more fiscal space or financial space to operate,” he said.
“The NWC, as we know, is constantly under financial duress over a long period of time and, therefore, is being relieved of this liability and the annual interest cost that is associated with the liability that provides them with little breathing room that’s represented by the amount of that interest cost.”
St Andrew Western Member of Parliament Anthony Hylton sought to find out if that fiscal space would automatically translate into any reprieve from a hike in water rates for customers, but Clarke explained that such matters were operational in nature.
“No, we separate those issues,” Clarke told lawmakers.
“That is an operational issue for the NWC and for the ministry in which it is, so we would not intervene into those kinds of matters.”