Archive for November, 2010
Review reveals $17M in cuts
(CNS): The first phase of the government’s review of four public sector entities has identified potential savings of $17 million in spending and over $15 million has been approved by Cabinet. The deputy governor revealed that, following an assessment of the prison service, tourism, CINICO and public works — some of the highest spending agencies — the review team found savings in each of them equal to 21% of the total budget of $72 million currently allocated to the four entities. The review recommends some radical cuts in head counts and changes to services in all four departments.
These cost savings will be realized over the next 12-36 months, Donovan Ebanks told the Legislative Assembly on Monday morning as he outlined the process of the review, which was initiated as a result of the agreement with the UK over the extension to the country’s borrowing parameters under the PMFL. The Cayman government is committed to realizing significant cuts over the next three years in order to eliminate the deficit and reduce borrowing.
Following the success of the first phase of the review, Ebanks said, government was now moving on to the second which will examine another eight agencies and hope to identify similar percentage savings. Ebanks said the results of the review sent a clear message regarding government’s commitment to reining in expenditure.
“To realize $15.2 million in savings from only four of government’s 62 public sector entities is a significant achievement," Ebanks said. "Those sceptics who condemned the approach and affixed to it labels such as ‘the fox guarding the hen house’ will not be as critical going forward when they realize that the approach has yielded accepted recommendations for 21%,” he stated.
Ebanks said the reviews had been conducted by teams of the brightest up and coming civil servants with assistance from the private sector. Ebanks said spending money commissioning an outside agency to conduct the review would have been rather ironic given the goal of the project is to cut government expenses. Now that such significant savings had been identified, he said, the service was committed to making the necessary changes.
“The public should know that Cabinet is fully committed to ensuring that these recommendations are implemented,” the deputy governor stated. “The Cabinet has appointed a monitoring mechanism to ensure that recommendations are not given lip service but instead are carried out as quickly and efficiently as possible and that it is kept regularly appraised of progress.”
He explained that the next phase, which will finish in December, will review the airports authority the port authority, children and family services, computer services, customs, education services, fire services and the RCIPS.
According to the report, which was laid on the table of the Legislative Assembly by the deputy governor making it a public document, the first phase has recommended some radical changes and cuts in order to realize the savings.
In the prison service the review has recommended closing the women’s prison at Fairbanks, have prisoners contribute to their own health care costs, sending high risk prisoners overseas, privatising prison escort and removing the prison officers’ housing allowances. Altogether more than $4 million dollars of cuts was identified in the service.
Meanwhile, in the Department of Tourism the review team recommended that it transfer a number of its jobs to other departments, such as scholarships to the Education Council, accommodation inspections to the Department of Environmental Health andthe analysis of tourism statistics to the Economics and Statistics Office, to allow it to concentrate on its core activity of promoting the Cayman Islands. It also recommends that the DoT stop sponsoring events such as the Jazz Fest. The review identified a $3.5 million of possible savings for the department.
Cost cutting at public works will be down to head count reductions and by privatisation of many of the services it currently provides, amounting to over $2.2 million in savings. However, the review team warned that with the current unemployment levels, care needed to be taking when reducing jobs that government did not shift salary costs to social costs.
At CINICO, the government’s health insurance company, the review team recommended that government reconsider the health benefits given to future civil servants, review of existing policies and that the body needed a redesign of its business strategy and claimed it could realize as much as $7.2million.
Cruise port not settled
(CNS): The premier told the Legislative Assembly Monday that government, the port authority and the developer DECCO are all still negotiating the details of the proposed development of cruise berthing facilities in George Town. While answering a number of questions from the opposition member for East End, McKeeva Bush said that such negotiations were always difficult, especially as the public were saying one thing, the developer wanting another thing and the government something else. The premier said the current negotiations were focused on the length of the lease the developer would get on the land which would be reclaimed as part of the project.
Bush said under the agreement signed in September, the lease could be up to 99 years but how long it would actually be was the issue in question. “The range which is provided for in the framework agreement is a long term lease and the definition of long term is between 21 and 99 years. The reason for that range is because until all the revenue, cost and risk analysis has been completed it is not possible to determine the period of time necessary for the financial viability of the project.”
The premier stated that the negotiations were highly sensitive and still ongoing. “Obviously the developer will want as long a lease as possible and the government is working to get as short a lease as possible.”
He said the period of the framework agreement between the public authorities and Dart’s general contracting company was for four months with room for a two month extension if needed and Bush said he was hoping some agreement would be arrived at before the end of this year. He confirmed that the developer has estimated the project will take between 18-24 months to complete once work is underway.
Asked by Arden McLean if there had been any concerns raised by the Foreign and Commonwealth Office in the UK, about any aspects of the project, the premier said he was not aware of any and if the member knew anything about that he should let him know.
The government is hoping that it can come to a favourable agreement where DECCO finances and constructs two finger piers in George Town and the associated upland facilities. The developer will recoup his investment partially through fees from the cruise lines and partially through the revenue earned from the potential landside facilities ona long term lease. Once that lease is up the facilities will revert into the hands of government.
The development of the facilities will include reclamation of land for both the piers and the upland element of the project and will also require redevelopment of the downtown George Town area. There have been concerns in a number of quarters that the development could impact the quality of Seven Mile Beach and may have a detrimental impact on Cayman’s overnight tourism product.
However, according to government Cayman must develop these facilities in order to hang on to its share of the cruise business. The need for cruise berthing facilities it says has been further compounded by the arrival of a new class of mega cruise ships that the cruise lines have sated will not call at ports without berthing facilities.
With no money to fund the development of piers the government sought proposals from the private sector and selected DECCO (part of the Dart Group, the developers of Camana Bay) because as well as being able to design an construct the facility the company was also in a position to finance the project.
Government signed an MOU with Dart in April and then a framework agreement in September. Although it was announced that an environmental Impact Assessment would be started after the MOU was signed so far it has not been confirmed if the report has been completed or when it will be made public.
Fat kids eat healthier food than skinny kids, says study
(Daily Telegraph): Overweight children often eat more healthily than their thinner classmates, according to research suggesting that a lack of exercise, rather than a junk food diet, may be to blame for obesity. A study of 900 primary school pupils in Norway found that fat children ate healthy foods – such as fruit, vegetables, fish, and brown bread, as well as low-calorie cheese and yoghurt – more frequently than their normal-weight peers. The research suggested that a good diet without exercise would not be enough to prevent weight gain. It follows research published in September that suggested that diet had the greatest influence on weight.
The findings, in a study by Telemark University College and the Norwegian Institute of Public Health, represent the latest contribution to the debate over whether diet or exercise is more important in combating obesity. Academics monitored the weight, exercise levels and eating habits of 924 children aged nine and 10 and questioned their parents about their own lifestyles. The children were asked how often they had eaten a variety of foods, both for main meals and snacks.
Hong Kong bids to be global finance hub
(AFP): Hong Kong launched a campaign Monday to promote itself as a global financial hub and rejected suggestions that it was trying to counter growing competition from Shanghai. The three-million-Hong Kong dollar (US$387,000) first phase of the campaign will see officials travel to cities including London and New York to promote Hong Kong. "Hong Kong has a unique position. This is where both the China opportunities and global opportunities converge, we have both advantages," K.C. Chan, the Hong Kong government’s secretary for financial services and the treasury, told a news conference.
Hong Kong has been trying to establish itself as an offshore trading centre for the yuan, China’s currency. The city is expected to draw as much as 14.7 billion US dollars’ worth of yuan-denominated bank deposits this year.
No elections for new councils
(CNS): The district councils which have been outlined in the Cayman Islands Constitution will not be elected bodies but the members will be selected by Cabinet. According to the law, which will come before legislatures during this current sitting, the new local political bodies designed to advise the relevant elected members of the Legislative Assembly for the districts will all be appointed by government. Of the maximum of ten councillors only two have to be recommended by the opposition in each district, unless there is no government member in the constituency when Cabinet will only be able to appoint three members. (Photo by Lisa Butcher)
The members will have to live in the district and, according to the proposed legislation, will have “special qualifications, training, experience or knowledge of the district” suitable to the role.
There is no provision in the law for the new district councillors to be elected by the people of the district. So far, the only district in which such an advisory body already exists is North Side, where the independent member, Ezzard Miller, held public ballots at district meetings to elect the council. So far that body has undertaken a number of projects, including raising the money to install a network of close circuit television cameras to help fight crime in the community.
Miller meets regularly with his council to discuss the motions and questions he intends to bring to parliament, as well as what position he should take on government legislation and policies on behalf of the people of the district.
Under the proposed law, which will introduce councils in all six electoral districts, the members will be appointed for one year but can be reappointed after that, and the terms and conditions of service will be determined by the government.
The main role of the members will be to advise their MLAs on the major issues with regards to the district’s needs and to help their elected representatives discharge their duties towards their constituents more efficiently and effectively. The MLAs will then take the advice of their councils to the relevant ministers when necessary.
The district councils will receive some funding through the budgetbut they will also be able to raise their own cash for specific projects. The councils will be expected to meet a minimum of four times per year in public, though the chair will have the power to call for in camera sessions.
Mac hints at stimulus
(CNS): The country’s premier has offered some future hope for the construction industry in the coming months as he says he will be introducing a range of incentives, which include reducing and deferring planning fees and rebates on work permit fees for senior staff. McKeeva Bush said that he will be announcing full details of what will amount to a stimulus package for development in the next week or so but hinted in the Legislative Assembly on Friday afternoon that the government was discussing some incentive proposals for developments starting in the first half of 2011. He said the construction industry was of particular importance to the local economy and he wanted to kick start projects.
The premier suggested that he was considering one off reductions for new or renewed work permits for senior and specialist technical staff, such as architects and engineers, in the construction industry working on projects that would be underway and employing Caymanians before June 2011.
He said a stimulus package for the construction sector would be like a stimulus package to the whole economy as once projects were underway they would fuel consumption, not just for the developments but those jobs created by the projects would see the employees spending in the local economy. He said duty waivers would also be available for certain goods and materials relating to new developments.
Bush said he was limited in what he could do because of the commitment he had made to the UK for the three year budget plan, but he said the construction industry was an important place to start to offer a stimulus package and he was going to impress upon the UK the need to give the sector assistance. The premier said once the analysis and research was complete, he could be more precise about what size reductions the government could give on the various fees and duties associated with the business of developing.
“We need to jump start our economy now,” he told the Legislative Assembly, and said there was reason to be cautiously optimistic that things were improving. “It is going to start to get better and we are going to pull ourselves out.” Bush warned that government had to be careful, however when it started there would be jobs again for Caymanians.
The premier raised the issue of the stimulus package in what was a heated debate regarding a private member’s motion on duty waivers brought by the independent member for North Side. Ezzard Miller had asked government to make it a requirement that duty waivers could only given on goods bought at local merchants to ensure the locally economy benefitted. However, government proposed an alternative motion which suggested instead that where waivers were given government would give a higher percent to good’s bought on island.
The debate is set to continue on Monday when the Legislative Assembly meets again.
Politicians call meetings over East End Seaport
(CNS): The opposition member for East End, Arden McLean, and the independent member for North Side, Ezzard Miller, will be hosting public meetings in their constituencies next week regarding Joe Imparato’s proposal to government to develop a commercial port on land he owns in the High Rock area of East End. The elected representatives have said that they believe there is significant opposition to the idea in their districts, which will both be affected by the potential development should it go ahead. McLean and Miller stated that the meetings would allow people to air their feelings, share information and enable the MLAs to ensure that they are representing their constituents fairly.
The developer of the proposed project, which he says will include oil storage, cruise home berthing and a mega yacht marina as well as a cargo port, will be given to government to manage once he has finished it. The developer has admitted that he will make the return on his investment from the fill or marl which will need to be removed in order to create the facility.
Although Imparato has said he also intends to hold a series of public meetings in the districts, dates for those meetings have not yet been released and it is not clear if he will attend the meetings to be hosted by the MLAs, though they said that an invitation has been extended to him.
As one of Grand Cayman’s most pristine and undeveloped areas, there has been opposition to the proposal from outside the district as well, especially from divers. CNS contact CITA and a spokesperson said that members had not yet been polled regarding their feelings but the organisation would expect that any such development would undertake a thorough environmental impact assessment. The spokesperson said that until the members had seen the full plans it was unclear how many and which dive sites were at risk and how much of a negative impact that would have on the tourism industry.
Speaking in the Legislative Assembly on Friday, Premier McKeeva Bush ridiculed the member for East End for voicing his intentions to lay “in front of the bulldozers” if the development went ahead, as he offered government’s backing for the proposal. Bush told the House that his government was pushing hard to kick start the local economy by going ahead with projects to advancethe country’s infrastructure and included the cargo development in his list.
All members of the public are invited to attend the meetings, which will be hosted by Arden McLean at the civic centre in East End at 8pm on Monday, 8 November, and North Side MLA Ezzard Miller will host his meeting at the civic centre in North Side at 8pm on Tuesday, 9 November.
Deficit change down to cuts
(CNS): Although government revenue did not increase significantly in the last financial year, reductions in operating expenses of around $17 million have resulted in smaller deficit for than government had predicted earlier this year. While the UDP administration had originally called for a $5 million surplus when it brought its first full budget, as the financial year drew to a close it revised those expectations and predicted a deficit of as much as $45 million. Unaudited figures now reveal, however, that as a result of spending cuts the actual deficit is going to be closer to $15 million. In the Legislative Assembly on Friday the premier said the results were taken from management accounts prepared by the Treasury.
“The financial results and positions reflect what ministries and portfolios have posted in their general ledgers for the years ended 30 June 2010 and 30 June 2009,” McKeeva Bush told his legislative colleagues following some speculation regarding the results. He said confirmation and discussions had been held with the various ministries and government companies and the results were both meaningful and robust.
Although the accounts have not been audited by the auditor general yet, Bush said the figures form the basis for the preparation of core government results that will be included in the consolidated entire public sector financial statements that are audited by the Auditor General’s Office.
The premier said although there would be expected changes during the process of auditing, he said government found it “desirable" to release the preliminary figures.
Setting out the latest figures, he did not outline where the cuts had been made but noted that the revised budget had anticipated that government would spend $502 million in this financial year but these figure suggest government actually spent around $485 million. He also said that the anticipated losses by statutory authorities and government companies of around $2.5 million turned out to be around $1.5 million.
Government revenue had been predicted to be $562 million when it brought its 2009/10 budget but it revised that forecast down to $492 million, so the revelation that government earned some $502 million in the last financial year means government earned $10 million more than anticipated.
According to a written answer given to the opposition this week following a question submitted in the previous sitting of the House that was never answered in the chamber, most of government’s revenue earning routes took in less than anticipated. Earnings from duty, for example, reached only 85% of the expected revenue, while the mutual fund and securities sector both exceeded expected earnings.
Although it was not clear where exactly the cuts were made, Bush said this year’s personnel bill for civil servants in core government amounted to $228 million or 47% of the operating costs. In the original budget government had expected to spend $244 million on pay and benefits so had made savings of some $16 million even before the 3.2% rollback was introduced in July of this year.
Hospital plans forge ahead
(CNS): The health minister has denied any change regarding the government’s commitment to the proposed hospital developmentby Dr Devi Shetty. Mark Scotland said that the legislative changes required to the health practitioners and tort laws, part of the deal with the India doctor, would be brought to the Legislative Assembly in the next sitting and the organ donor law would follow soon after. He also said that Shetty and his local partners had identified a short list of possible locations and were examining them for suitability. Responding to a series of opposition questions in the LA on Friday morning, Scotland said he was meeting regularly with Shetty’s team and they had expressed no frustrations.
The minister explained that in its agreement with Shetty, the internationally acclaimed surgeon, to develop a health city in the Cayman Islands, the government had agreed to make certain legislative changes. This included changes to the law to enable doctors with qualifications from India to be able to practice here, creating an exclusivity period for Shetty’s hospital on medical tourism and a cap on damages claims regarding medical malpractice suits, as well as a new law to permit tissue and organ donation.
Scotland said the government was committed to the tort reform, not just because of the Shetty hospital but because of the problems it was causing for other local medical practitioners, such as Ob/Gyns, despite the Law Reform Commission’s recommendations against it. Scotland said the LRC was still in a period of consultation and was seeking input and had not concluded anything yet.
The minister added that government was fully committed to the venture and was moving forward on all the necessary work required to make it a reality.
Aside from having shortlisted the potential locations for his health city, Shetty’s team was preparing the designs for the first phase of the project, which would be a 150 bed tertiary care hospital, Scotland revealed.
“I can say with confidence, based on my discussions with Dr Shetty and his local team that he still remains fully committed to proceeding with all the phases of the project, including an integrated hospital and medical university and assisted-living facility,’ he said. “Government remains fully committed to this project, which we see as an important and integral component in not only creating a medical tourism industry in the Cayman Islands but also increasing local access to tertiary care.”
Scotland dismissed any allegations that there were problems on either the government or the developer’s side and that government was hard at work meeting its commitments under the deal.
Shetty will be in the Cayman Islands this week and will be answering questions at a special Chamber meeting on Wednesday afternoon before delivering a presentation at the country’s first ever national health conference, which opens on Thursday evening.
Fatal floods as Hurricane Tomas sweeps over Haiti
(BBC): Heavy rain from Hurricane Tomas has battered western Haiti, causing floods which have killed at least four people. The eye of the storm clipped the island with winds of 85mph. Up to 25cm of rain was forecast. There is a danger of mudslides and further flooding, which could worsen the current cholera epidemic affecting parts of the country. But the storm appeared to have spared the hundreds of thousands of people who rode it out in flimsy tent camps. The government had urged those living in tented homes to find better shelter, but many said they had nowhere to go. The storm has underlined the fact that nearly a year after Haiti’s devastating earthquake, more than 1.3m people are still living in makeshift canvas homes.