Thu | Dec 7, 2023

logistics hub challenge

Published:Tuesday | March 31, 2015 | 12:00 AMEdmond Campbell

THE MINISTRY of Industry, Investment and Commerce has revealed that there is a high probability that insufficient funding and/or lack of fiscal space could negatively impact its logistics hub initiative.

In a risk management matrix which was tabled on Tuesday during a sitting of the Public Accounts Committee of Parliament (PAC), the ministry said the project could be faced with implementation delays and non-achievement of project scope.

A similar set of risks are outlined in the document in relation to the much-talked-about Caymanas Special Economic Zone.

The ministry said it has kept the Ministry of Finance informed of the project objectives and requirements while lobbying for requisite funding. It has also indicated that efforts are being made to attract private-sector financing through public-private partnership and privatisation modalities.

The logistics hub initiative is intended to pull significant investments into Jamaica and position the country to seize opportunities stemming from increased trade flows through the region, as a result of the expansion of the Panama Canal which is expected to be completed in early 2016.

At Tuesday's sitting of the committee, Edmund Bartlett, a member of the PAC, raised concerns about the ministry's capacity to drive major projects such as the logistics hub.

His comments came against the background of an admission by Vivian Brown, permanent secretary in the Ministry of Industry, Investment and Commerce, that there were significant weaknesses in the ministry's institutional capacity to carry out its responsibilities.

Uncertain future

"We are looking at a period of time down the road for which there is great uncertainty and that your own expression of high risk in relation to implementation gives no comfort to us," Bartlett asserted.

However, Brown said the ministry has sought assistance from the Cabinet office, through its Public Sector Modernisation and Transformation division, to carry out a strategic review of the ministry and to develop a modernisation plan that would address the institutional deficiencies.

He also disclosed that the World Bank had signed off on its support for the ministry's modernisation plans and Cabinet office was now seeking to identify consultants to work on the project.

Brown said the Ministry of Finance is also working with his ministry on a short-term basis to carry out a limited review of the ministry with specific focus on weak areas, including corporate planning, monitoring and evaluation and research.

The permanent secretary appeared before the committee to respond to an activity-based audit of the ministry conducted by the Auditor General's Department.

The auditor general found, among other things, that the ministry lacked a comprehensive risk management plan and that it is not effectively monitoring and evaluating policy implementation.