Govt. Evaluating Firm Offers for Divestment of CAP

KINGSTON — Minister of Finance, Hon. Audley Shaw, has informed that the Government is currently evaluating firm offers for the divestment of Clarendon Alumina Production Limited (CAP).

"I should indicate that the early divestment of CAP would result in a positive improvement on the public body’s balances, should that be accomplished within this fiscal year,” Mr. Shaw said.

The Minister made the announcement as he opened the debate on the First Supplementary Estimates for the 2011/12 fiscal year, in the House of Representatives on September 8.

Mr. Shaw said that one of the principal reasons for the tabling of the first Supplementary Estimates was that the anticipated divestment of CAP by the first quarter of the 2011/12 fiscal year had not yet been finalised.

"Out of an abundance of caution therefore, the inclusion of CAP in this supplementary budget meant that an additional $5.3 billion had to be found to accommodate the deficit from CAP. Consequently, the adjustment required from other public bodies total $5.1 billion, resulting in an overall balance deficit of $10.4 billion, which is consistent with the targets set out in the International Monetary Fund Standby Agreement,” the  Minister explained.

Meanwhile, Mr. Shaw stated that the country has made progress in the containment of discretionary waivers, due to the monthly cap that was put in place by the government.

The Minister also informed that the government was behind in its revenue collection of about $3.3 billion, but that the situation is improving.

“I am to indicate that the picture is already turning and looking much more positive in that regard, because in the month of August we actually had a revenue increase of $1.6 billion, thereby reducing that deficit down to $1.7 billion, and we are confident that certain initiatives that we have embarked on will continue to reap the increases in revenue,” Mr. Shaw said.

He indicted that there was an increase in revenue collection of 17 per cent under the pay as you earn (PAYE) system.

“This is consistent with the fact that in March the economy grew by 1.4 per cent and in June the economy grew again by 1.5 per cent. So, where there is growth we know that there is job enhancement,” the Minister said.

Mr. Shaw also pointed out that Remittances were up 6.5 per cent for the first five months of 2011, adding that bad loans were “tapering off” and consumer loans were on the increase.

By Latonya Linton, JIS Reporter