Sewage problem leaves hole in budget

| 23/04/2012

sewerage.JPG(CNS): Government's failure to sell off the Water Authority’s sewerage treatment system as planned for this financial year will increase the deficit it is likely to face at the end of the fiscal year. Government had already announced an expected deficit for 2011/12 at a recent Finance Committee meeting but continued problems with the tendering for the sewerage has delayed the sale and means that the $20 million government was expecting to come from the sale will cause a hole in the budget. The governor said on Friday evening that there was little chance of the divestment being made before the end of this financial year.

The civil service will now be under greater pressure to cut public spending to plug the growing deficit, given that government cannot borrow further cash and must comply with the parameters of the Financial Framework Agreement the premier signed with the UK. The agreement and the UK minister have also pointed to the need for good governance.

“There is a very clear process set out on the divestment ofassetsand the first stage would be a clear business plan,” Governor Duncan Taylor said about the sewage treatment sale, which has already been subject to a tendering process but which was stopped as a result of queries raised by ministry officials, the Water Authority Board and the Central Tenders Committee (CTC).

The governor implied at a press briefing on Friday evening that the divestment of that asset or the Water Authority in general would have to be re-tendered. He said that any divestment of public sector assets had to be conducted under a specific process. The UK does not object to the principle of the Cayman government selling assets to raise revenue when there is a business case but it had to be in line with the commitments made in the framework.

Taylor also stated that how government would fill the hole this created would be a matter for the premier. He said the deputy governor was looking very hard at ways to cut public sector spending.

The government has been planning to sell off the public sewerage system since it was elected but there have been a number of issues and allegations of problems and irregularities surrounding the bids.

According to minutes released under the FOI law, government was recently still putting pressure on the board to divest the sewerage before the end of this financial year.  In his role as minister of finance, Mckeeva Bush had planned to raise close to $60 million from the sale of public assets in this financial year and the money from the Water Authority was earmarked for completing the school projects.

See related article:

Sewerage bids in re-review

Category: Local News

Comments (17)

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  1. Anonymous says:

    Sell the Glass House building, like the Tower building was sold for scrap. Kill two birds with one stone and then that can become public open space or parking. Won't be a lot of money and it won't reduce the deficit but it will create a little cash flow.

  2. Anonymous says:

    we can always sell more 'intellectual property'……..

  3. Anonymous says:

     

    No wonder they can't sell this decrepit piece of infrastructure. Upgrading to a new $18M plant in 2002 was a serious error considering the cracked sewage line along West Bay Road needed fixing shortly after it was laid in the mid '80s.

    The old lagoon system choked on the deluge of seawater leaking into the sewer system and the new plant is being eaten away by the salt water and massive amounts of sulphur gas produced from the plant. Sadly if the sewer system had been fixed a long time ago the old lagoons might have worked properly, the new plant would still be in great shape and operating efficiently with a minimum of noxious gas emissions. 

    Now it's like trying to sell a lame racehorse.

     

  4. Anonymous says:

    Mr. Muttoo, this is more very good inspiration for next year's Run Down. I can't wait. LOL.

  5. Anonymous says:

    Was that manhole cover custom made for the UDP?

  6. Anonymous says:

    OH CRAP!  Simple and shitty headline

  7. Anonymous says:

    You cannot sell an asset and count it as part of income to reduce the deficit.

    • Anonymous says:

      and of course you can only sell an asset once, what happens next year and the year after? Totally unsustainable financial model unless you drastically cut government spending.

    • Anonymous says:

      You can if you have a gain. You can also use it to reduce debt.

      • Anonymous says:

        Why can't you unnastan? ALL the gain is for MY account?

      • Anonymous says:

        The headline is not about reducing debt, it is about the deficit. The only thing we will gain is higher sewage costs.

      • Anonymous says:

        The article talks about "$20 million government was expecting to come from the sale will cause a hole in the budget". Therefore, the assumption most people will make is that the whole amount of the sale will count as "income" and reduce the deficit by that amount.

    • Anonymous says:

      A dunno. Am no financial expert.

  8. Anonymous says:

    A more apt title to the story would prob be:

     

    "Govt can't sell S#!T"

     

    Totally agree with Mon, 04/23/2012 – 08:45.

  9. Anonymous says:

    shambolic incompetence since may 2009……

  10. Knot S Smart says:

    It is clear that the Govt has squandered our funds with excessive travel, a lavish lifestyle for the Premier and crew, giveaways of public cash to churches and supporters, paving of private driveways of supporters, excursion junkets for large parties of supporters at a time .. etc.. etc… etc..

    Now they want to dispose of our assets to cover their foolish waste of our taxes.

    Thank you Mr. Governor for speaking up…

    This group needs to be reigned in!

    And quickly before we past the point of no economic return…