Finance Ministry to Make Recommendations on Entities Operating at a Loss


The Ministry of Finance and the Public Service continues to review the performance of a number of entities under its portfolio that have been operating at a loss, and will make formal recommendations for rationalization and restructuring where necessary by the end of next month.
Minister of Finance and the Public Service, Audley Shaw, gave this undertaking while opening the 2008/09 Budget Debate in the House of Representatives today (April 10). “We will be aggressively seeking to privatize several entities during this fiscal year. However, no provision for any revenue from this privatization has been included in this Budget,” he noted.
Outlining the current situation with these entities, he said that Air Jamaica has accumulated losses of US$1 billion and debt in excess of US$550 million with spending projections of $3.2 billion for debt and interest financing.
“We have commenced privatization of the airline with the appointment of the International Finance Corporation as the lead financial advisors. We project to have the privatization finalized by March 2009,” Mr. Shaw told the House.
Meanwhile, he indicated that $14 million of the Sugar Company of Jamaica’s debt has been absorbed and that this year, the government expects debt service of $2.7 billion for that entity. “We are in advanced negotiations with the preferred bidder for the company’s assets and as such, I cannot comment much further on this company and the implications for this year’s Budget,” he said.
In regards to the National Road Operating and Constructing Company (NROCC), the Finance Minister said this entity continues to be a “great challenge” for the government.
“Prior to our election to office, the then government agreed to the expansion of the Mount Rosser Bypass and to the construction of the Sandy Bay to the Williamsfield section of Highway 2000. These expansions will be financed through concessionary loans. Currently, NROCC has a projected loss of $8 billion and projected liabilities of $40 billion (an increase of $10 billion over last year due to exchange rate movement and inflation-indexed bond) for this fiscal year,”
Mr. Shaw outlined. He said that “going forward our primary plan is to refinance the company’s debt with lower interest rates and longer maturity periods”.
In addition, Mr. Shaw said the matter of a projected loss of US$34 million for Clarendon Alumina Productions Limited, is being addressed by the government.

JIS Social