JDIP - pork barrel or road saviour?

The clumsily named Jamaica Development Infrastructure Programme (JDIP), at $36 billion, is not only the biggest development fund and programme in the history of the country, it has the ugly potential of being the biggest political pork barrel ever. The Opposition, with its vast experience in government and with a general election due next year, understandably, is running scared.

They staged a protest walkout during the Standing Finance Committee's examination of the Estimates of Expenditure and subsequently refused to participate in voting on it, citing lack of transparency in the handling of JDIP by the Government. The planned 'spontaneous' walkout, with one MP telling constituents that he had to get to Parliament for the event, was assisted by the Government side stonewalling questions about the Road Maintenance Fund under JDIP. And both sides have resorted to press conferences to conduct the nation's business outside Parliament.

As one of the dailies reports, the long-simmering discontent was brought to a boil by questions first raised by the North Trelawny Member of Parliament Dr Patrick Harris on the Opposition benches, who queried how roads were selected for repairs. Harris charged that roads in his constituency were being ignored, compared to work being done on roads in constituencies represented by government MPs. He claimed that the entire process lacked equity and transparency.

In the 2009-2010 Budget, the Government introduced a cess on fuel of $8.75 per litre, which, it said, would be put into the RMF for infrastructural work on roads. The Government then switched into a $340-million loan arrangement with the China EXIM Bank, and told the country that instead of using the allocation from the cess directly to rehabilitate roads, it would be used to pay down the Chinese loan.

The commitment was that in 2009-2010, 20 per cent of the increase from the cess would go to the RMF, 35 per cent last fiscal year, and 50 per cent this year. The Government has dishonestly failed to honour this very public commitment

Only 20 per cent was paid over to the RMF last financial year instead of the projected 35 per cent, a Cabinet decision which the auditor general says is a violation. The technocrats managing the RMF have expressed concern that the fund will be unable to service the loan after this April if the Government does not pay over the income as was promised at 35 per cent in year two and 50 per cent in year three. So much for 'fiscal responsibility' on this one.

Off-Budget financing

MP Harris said the process of using the fund was corrupt. Dr Omar Davies, opposition finance spokesperson, who knows a great deal about off-Budget financing, picked up the fight, charging that the Government was attempting to hide the true state of affairs with the RMF and the programme of roadworks by only making reference to a sum of $750 million in the Estimates of Expenditure, which the Government said was to assist the RMF in meeting its counterpart obligation towards the Chinese loan, and making no reference to a further $8 billion slated for expenditure on roadways and bridges for which there was no mention in the Estimates.

"We want the full amount to be included in this. If the Government has acknowledged that the RMF cannot meet that obligation (loan repayment), to hide it in this yellow book is not acceptable. We want a full Budget about what is being spent by the Government of Jamaica," Davies demanded.

"This is not technical sloppiness. This is a deliberate attempt to cover-up. We reject it. This is a clear attempt to use government resources in a corrupt way. We demand that transparency be there," the former minister of finance called out.

In his opening Budget Debate presentation last Thursday, Minister of Finance Audley Shaw set out the objectives of the RMF, which are "to overhaul, upgrade and improve the main and parochial road network throughout the island. The overall intention is to keep the island's main road network at internationally acceptable standards.

"Maintenance programmes are geared towards pothole elimination, cleaning of drains, the timely repairs to bridges and road furniture (street signs and pedestrian crossings), thus enhancing general road safety. Consequently, the RMF was commissioned to implement JDIP to facilitate improvement of the roads and foster economic growth and development. Projects under JDIP are designed by the National Works Agency (NWA) and are expected to be executed over five years at a cost of US$400 million. Eighty-five per cent (85 per cent), or US$340 million of the cost, will be provided as a loan from the China EXIM Bank and 15 per cent (US$60 million) from the special consumption tax (SCT) on fuel.

The minister outlined the main areas of focus for 2011-12 as the:

Rehabilitation of 120 main and parochial roads; Rehabilitation of seven housing-scheme roadways; Construction of 12 new bridges; Installation of 17 modular bridges; Construction of 27 retaining walls; Patching of 200,000 square metres of roadway; River-training solutions in six locations.

"I wish to stress," Shaw said, "that in addition to the 20 per cent fuel cess of $1.3 billion [it is 50 per cent which is due this year] and the proceeds of the motor vehicle licences of some $738 million, the GOJ has budgeted an additional $750 million in support for the RMF to ensure financing of 15 per cent down payment on US$100 million for JDIP expenditure for FY2010-11, $800 million to finance interest costs on JDIP and PetroCaribe loans, as well as administrative and routine road maintenance by the RMF.

"I must stress," the minister said, jabbing at the Opposition, "that notwithstanding the public posturing on this issue, for the second year the summaries of expenditure under this programme is published in the Public Bodies document. It is transparent, unlike the previous Deferred Financing Programme."

The Government, in its own government-by-press-conference approach, said JDIP/RMF was operating as a loan scheme, with the Chinese loan merely guaranteed by the Government and a 15 per cent contribution to the project made under the contract. The expenditures of the programme are reported under Public Bodies and had been examined by Opposition-chaired parliamentary committees. Minster of Transport and Works, Michael Henry, has promised that the NWA, the executing agency, will post online progress reports on JDIP. With the manager of the agency securely tucked under the minister's armpit in public defences of the JDIP, not a lot of confidence is inspired in the executive autonomy of the agency.

We still don't know how the roads for rehabilitation are selected. All the same, the Government is on solid ground for not including the expenditure of Public Bodies not operating from the Consolidated Fund in the regular Estimates of Expenditure, ground established by the last administration, now in Opposition and bawling for murder.

All the Government needs to do for maximum transparency, and removing any perception of politics in the JDIP/RMF, is to pay over the committed amounts from the SCT to the executing agency, and leave the agency to select roads by criteria negotiated and agreed by the whole Parliament, to rehabilitate the roads using the rigorous and rigid procurement procedures now operational in public administration, and report. Which is how civilised public administrations ought to operate, anyway.

Suspicions

To the extent that the minister won't let go, there will always be suspicions that there is politics in JDIP. The minister is quite right that MPs - and he is one - ought not to be selecting roads. The same principle should now be carried over to the Constituency Development Fund leading to its scrapping.

One of the patches of a conservatively responsible Budget speech delivered by the minister of finance last Thursday which I really liked was on 'Good Governance Policies'. As everybody knows, I am an unrelenting advocate for the reformation and improvement of governance in defence of the general public interest.

Shaw said, "The Government has embarked on a series of policy considerations and changes geared towards practices of good governance." He explained that "good governance embodies processes that are participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive, and which follow the rule of law. And in outlining the good governance practices being pursued, he led with "fiscal responsibility".

Martin Henry is a communication specialist. Email feedback to columns@gleanerjm.com and medhen@gmail.com.