PUBLIC BODIES

OVERVIEW

The Public Sector continues to maintain a significant presence in the Jamaican economy in spite of its on-going programme of privatization, and other forms of rationalization of public assets over the past two decades. While the Government's involvement in a number of activities remains under constant review, indications are that it will continue, through Public Bodies, to play a key role in stimulating and sustaining economic development and improving the welfare of the Jamaican population.

Public Bodies, which comprise statutory bodies and authorities as well as government owned companies, collectively represent an important subset of the public sector and are integral to the development and implementation of a number of key policy objectives. The contribution to the economy made by the select group of entities, whose budgets are presented in the Public Bodies Estimates of Revenue and Expenditure, is significant and varied. Collectively, these Public Bodies employed total assets in excess of $170,000 mn at March 31, 2004. Their annual capital programmes exceed that of Central Government and they attain significant operating surpluses each year.

CONTRIBUTING TO GROWTH

Investments by some entities in physical and human capital have assumed greater prominence as budget realities have constrained Central Government's capacity to undertake needed investments in these areas. Some entities play a key role in delivering on Government's commitment to support the productive sector, particularly by providing financing for critical inputs and services. These entities include Development Bank of Jamaica (DBJ), Micro Investments Development Agency (MIDA), Jamaica Mortgage Bank (JMB), National Investment Bank of Jamaica Limited (NIBJ), and the Self Start Fund (SSF).

Others are engaged in implementing some of the core responsibilities of Government including the development of infrastructure. For example, Port Authority of Jamaica (PAJ), National Water Commission (NWC), Urban Development Corporation (UDC). HEART Trust NTA (HEART), and Health Corporation Limited (HCL) are involved in the provision of social services.

In addition to facilitating programmes for social and economic development, some Public Bodies return value to Central Government in the form of taxes and dividends. Public Bodies also represent the country's response to the institutional requirements for building and sustaining a modern and competitive economy. These entities, for example, the Transport Authority and Civil Aviation Authority (CAA), provide the regulatory framework to promote clear and transparent rules in support of the country's position in the increasingly integrated global economy.

Programmed contributions from public bodies during FY 2004/05 are outlined below.

• UDC, PAJ and NWC will spend approximately $10,114mn to improve physical infrastructure. This includes $1,140mn being spent by the NWC on the Port Antonio Water Supply and Sewerage project and $3,899mn by PAJ on port upgrading. A major component of PAJ's capital expenditure will be the costs associated with completion of work on Phase 4 of the expansion of the Kingston Container Terminal. The UDC will spend $3,470mn of which $2,664mn represents implementation of projects for Central Government Ministries, Departments and other Agencies of Government. The NHT and the NHDC will together spend $11,170mn to improve and increase the housing stock, mainly through the provision of mortgage loans and project financing. A major portion of the expenditure by the NHT will go towards financing of housing projects in the inner city.
• HEART Trust will expand its new business model designed to increase access as well as enhance training certification of more students through various modalities. With the new model, HEART plans to increase the number of persons it trains annually from 33,000 to 100,000 beginning in the current year
• Amended rules governing the tax liabilities of some Public Bodies are expected to result in a significant increase in the contribution of public bodies to Government revenue.

LEGISLATIVE AND REGULATORY DEVELOPMENTS

The environment within which Public Bodies operate has been undergoing significant change in an effort to achieve international standards of transparency, and accountability in corporate governance.

The amended Public Bodies Management and Accountability Act (2001), which mandates, inter alia, that public bodies utilize corporate planning as a performance accountability mechanism, has started to yield positive results. The Ministry of Finance and Planning's priority for this year will be the development of regulations to give effect to the purposes of the Act. Efforts to improve the current reporting procedures that focus on making more effective and efficient use of information technology will also continue.

Jamaica's adoption of the International Financial Reporting Standards (IFRS) and the decision to change the system of accounting in government to the accrual basis will allow for greater comparability at the international level. The larger public bodies are already using the accrual basis. However, the conversion will facilitate greater accuracy in determining the full cost of services provided by the public sector and will assist in evaluating cost-effective delivery of services. The Ministry is also committed to assisting and facilitating the process of transformation through institutional strengthening by incorporating broad-based consultations and observing international best practices.

The recent amendments to the Companies Act place much higher requirements on Boards of Directors and will enhance the movement towards greater levels of accountability in public and private sectors alike.

RATIONALIZATION AND RESTRUCTURING

Within the overall context of facilitating prudence and efficiency in the use of public resources, the Ministry of Finance and Planning and the Cabinet Office are continuing efforts to rationalize the operations of Public Bodies. During fiscal year 2003/04 the following privatizations were completed:

• Ariguanabo Textile Company Limited - (1) Land comprising (13.76 hectares) and a well were sold to New Era Homes Limited for housing development; (2) Two buildings were leased to facilitate light manufacturing activities
• Cotton Polyester Textile Company Limited - Two warehouses were leased
• Radio Jamaica Limited (RJR) - Sale of shares.

Other rationalization activities involved winding-up entities whose functions have become redundant

Cabinet considered and approved proposals to wind-up:

• Container Services Limited and transfer its functions to the Port Authority of Jamaica.
• Metropolitan Management Transport Holdings Limited and transfer its functions to Jamaica Urban Transit Company Limited and other Public Bodies.

The promotion of greater efficiency in government remains at the core of these efforts, which will take cognizance of the commitments made in the recently signed Memorandum of Understanding with the Jamaica Confederation of Trade Unions.

Back to Top  

Print this page / Email to a friend