BUDGET WATCH 2018 – Part III. Nearing mid-term…

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The Rowley Govt’s poor PSIP performance

The TTWhistleblower continues with Part III of its investigation into the Rowley Administration’s budget performance and the impact of expenditure failures on the economic hardships currently being experienced by large sections of the population.

Other small scale targets

Part of the spending in the low impact 2016 PSIP also involved what was described as “improvements to the Information and Communication Technology (ICT) infrastructure with an investment of $143.1 million under the Public Sector Reform Computerization Programme.”

In addition to this undertaking, $30 million was used “to advance the Establishment of the National Science Centre.”

For Tourism, the 2017 PSIP stated: “The GORTT invested $66.9 million in the Tourism Sector during fiscal 2016.

Recognising the need to diversify the economy away from its dependence on the energy sector, focus was directed to the development and advancement of the tourism sector and making Trinidad and Tobago a destination of choice.”

Nothing was said about how spending was focused and prioritized, the areas of intervention, the measurable outcomes and the visible improvements.

Early Childhood education

Many may recall the 2001-2010 PNM Administration’s dismal delivery record on Early Childhood Care and Education (ECCE) Centres. In that period, the PNM promised to build 600 ECCE’s, and in nine years delivered 50.

In the 2017 PSIP, it is said: “The Seamless Education System Project and Build 100 Programme were allocated $90 million and $40 million respectively for the construction of Early Childhood Care and Education Centres (ECCE).”

However, only $19.5million was utilized for 2016. The Build 100 Programme for ECCEs undergoing construction were put at various stages of completion by 2016:

ECCE PROJECT
COMPLETION
Marabella ECCE
98%
Wallerfield ECCE
98%
Tulsi Manas
95%
La Platta ECCE
94%
La Horquetta North ECCE
90%
Waterloo SDMS ECCE
85%
Cedros ECCE
82%
Avocat ECCE
78%
Chaguanas ECCE
78%
Cypress Gardens ECCE
64%
Glenroy ECCE
50%
Race Course ECCE
64%
Swaha Madras ECCE
42%
La Paille ECCE
33%
Spree Simon ECCE
32%
Upper Penal Rock Road ECCE
19%
San Francique SDMS ECCE
19%
Forde Street ECCE
17%
Iere ECCE
13%
Belle Vue, Maraval ECCE
11%
Maracas Bay ECCE
11%
Felicity ECCE
11%
Chatham ECCE
5%
Macaulay ECCE
5%
Sangre Grande ECCE
5%
Morton Street ECCE
5%

Through the “Seamless Education System: IDB Phase 2” ECCE projects comprised the following:

ECCE PROJECT
COMPLETION
Sonny Ladoo ECCE
95%
El Dorado SDMS ECCE
95%
Maracas Valley ECCE
95%
No. 1 Cascade Road ECCE
38%
Bay Road ECCE
25%
Picton II ECCE
22%
Poonah Bonne Aventure ECCE
22%
Petite Morne #2 ECCE
19%
Hokett Baptist ECCE
15%
La Brea – Belle View – Brighton AC ECCE
1%

An example of the progress being made by the Government in executing progress is found when one notes that the Sonny Ladoo ECCE which was 95% complete in 2016 review of the previous 12 months, remained 95% completed for the 2017.

No progress was made on the El Dorado SDMS ECCE either, as well as other projects, and the population waits to see what progress is made by the time the 2018 budget is delivered.

Housing

In the mid-year review of the 2017 budget, an already hefty allocation of over $1 billion for the Ministry of Housing and Urban Development was increased by some $376.8 million.

Under what was referred to as the “Accelerated Housing Programme” an allocation of $160 million was provided under the Infrastructure Development Fund (IDF) to the HDC for the construction of one thousand, nine hundred and forty seven (1947) housing units at nine sites:

•          Real Springs, Valsayn

•          Edinburgh Towers

•          6th Avenue, Malick

•          Fairfield, Princes Town

•          Malabar

•          Victoria Keys (Phase 3)

•          Bon Air, North (Phase 2)

•          Bon Air, North (Phase 3)

•          Vieux Forte, St. James”

By the end of 2016, PSIP funding utilization amounted to $294 million for ‘Housing and Shelter’. Budgeted expenditure under the 2016 PSIP was originally $348.7 million, amounting to a utilization failure of $54.7 million.

The 2017 PSIP committed: “An allocation of $160 million will be provided under the Infrastructure Development Fund to assist with the construction of approximately 2,300 housing units in fiscal 2017 under the Accelerated Housing Programme of the HDC.”

A further allocation of $15 million will be provided in fiscal 2017 for the rehabilitation of rental apartments and housing units in the HDC housing estates located in the North, East and South of Trinidad.”

The question is why in 2017, after failing to achieve softer targets in 2016, was the Housing Ministry’s allocation increased by an amount larger than its utilization failure the previous year?

The question also arises on the level to which Government is achieving its housing provision and estate improvement targets, given that its best PSIP achievement score hovers at 61% so far.

The 2017 period

With such a high level of failure to utilize capital expenditure with funds that were in fact available, we must now ask what the failure rate will be for the 2017 period by the time the 2018 budget is delivered.

Some of the targets for fiscal 2017, already past the half way mark included agriculture, tourism, trade and industry and energy.

Agriculture

According to the 2017 PSIP, the Government has committed itself to agriculture saying: “The Ministry of Agriculture, Land and Fisheries will be allocated an investment budget in fiscal 2017 in the amount of $112 million, to be administered by the various divisions of the Ministry ($86.5 million) and the Tobago House of Assembly (THA) ($25.5 million).”

Of the total allocation proposed for the Ministry of Agriculture, Land and Fisheries $32 million will be sourced from the Infrastructure Development Fund while $80 million is intended to come from the Consolidated Fund. The funds will be utilized for several development projects and programmes proposed by the Ministry in the following areas:

•          Upgrade of fishing landing facilities

•          Land development for farmers

•          Provision of irrigation systems and access roads

•          Development of the agriculture business and the continuation of scientific research

•          Development into new agricultural technologies.

With food and product prices increasing and a growing food availability crisis in Tobago, we wait to hear the Minister’s reporting on the 2017 PSIP and development programme performance.

Energy and Energy Industries

The 2017 PSIP also stated: “The Ministry of Energy and Energy Industries will also continue to spearhead the Government’s thrust in the development of renewable energy and energy initiatives, to reduce the country’s carbon footprint, as well as the dependence on traditional sources of energy.”

The Ministry will commission a consultancy on the analysis of waste to energy potential for the country. Furthermore, it will continue with its Outreach and Awareness Programme to promote energy efficiency with CARICOM Energy Month, which would involve the participation of schools, as well as the Programme’s roving caravan covering the country. The sum of $18 million will be allocated for these activities.”

With a third budget on its way, an illusory view of undertaking economic diversification, and an energy sector that is in the doldrums, we wait to hear what progress has been made, and what level of utilization failure in energy will be reported for this fiscal period.

Trade and Industry

Fresh from a State visit to Chile that was previously shelved for two years, the 2017 PSIP states that for Trade and Industry: “For 2017, the Ministry (of Trade and Industry) is expected to advance and transform its reach by focusing on restructuring the internal dynamics of the organisation as well as by strengthening relations with existing and new countries. The sum of $16 million will be allocated to assist with these initiatives.”

Absolutely no mention is made of the current bilateral and partial scope agreements and any progress made in the advancing into new markets such as Panama, El Salvador, Cuba and Brazil.

At present, at least five agreements are in force, including:

·         Trinidad and Tobago-Panama Partial Scope Trade Agreement;

·         Trinidad and Tobago – Guatemala Partial Scope Trade Agreement;

·         World Trade Organisation (WTO) – Agreement on Trade Facilitation;

·         Trinidad and Tobago – El Salvador Partial Scope Trade Agreement;

·         The Cariforum/EC Economic Partnership Agreement;

Little or no mention has been made of these despite the potential for local manufacturing and service sector companies.

With Brexit talks soon to be finalized and a direction taken by Great Britain for a slow or rapid exit from the European Union, one would have thought that Trinidad and Tobago would have been hard at work securing existing and possible new trade routes with the European Community, as well as with Great Britain.

Tourism

Promises in the Tourism sector by the Government’s 2017 PSIP appear to have been made to fill space rather than truly develop the sector.

What else is one left to think given that the Government is determined to shut down the Tourism Development Company (TDC), despite having made commitments on behalf of the State firm to undertake a fairly heavy amount of investment spending for 2017?

According to the 2017 PSIP: “The Ministry of Tourism has targeted the tourism sector for transformation into a prime economic sector. During fiscal 2017, an investment of $83.2 million will be made in the sector.”

Another key initiative of the Tourism Development Company Limited (TDC) is the establishment of a Visitor Relationship Management System. The global tourism industry has become highly competitive in attracting and maintaining destinations of increased tourism visitor frequency.”

The Visitor Relations Management Strategy will involve explicit efforts to develop a long term bond with visitors in order to stimulate repeat visitation, address visitor complaints and recommendations and take a proactive approach to monitoring customer interactions and identifying corrective measures.”

“The Project is estimated to cost $2.65 million. For fiscal 2017, an allocation of $0.4 million is provided to facilitate the official launch of the Visitor Relationship Management System and implementation of Phase I of activities. The Project, while in its formative stage, requires wide stakeholder input for acceptance and execution.”

Of the TDC’s importance to the Tourism thrust, the document also states: “The TDC has plans in fiscal 2017 for a programme of works for the refurbishment and enhancement of the Port of Spain Quayside with the objective of providing a festive and colourful environment for cruise passengers as their first onshore experience in Trinidad.”

The Government committed $0.3 million for the continuation of works including the repainting of Shed #3 and branding of the roof of Sheds #3 and # 4 which are visible to arriving passengers on cruise ships.

Do we then expect non-performance in Tourism as well? Given that a number of key strategic initiatives were intended for a sector which also intended to shut down the key delivery agency – the TDC.
In Part IV of this series, the TTWhistleblower continues its investigations in the Rowley Administration’s fiscal performance, looking wider at the Financial Services Sector and the Social Sector.

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