High fuel prices force $$B supplementary budget

Jul 27, 2008 News

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Escalating fuel prices on the world market have prompted the Government to approach the National Assembly to approve some $4.8B in supplementary budgetary allocations.
The details of the requests were illustrated in the first two Financial Papers for 2008 seeking money from the National Contingency Fund.
The papers were tabled by Minister of Finance, Dr Ashni Singh, and will be debated on Thursday to see if the House will reach a consensus and approve the monies.
The bulk of the money requested, some $3.5B, will be for the Office of the Prime Minister — Prime Minister’s Secretariat. The money is listed to facilitate costs related to higher fuel prices.
As of yesterday, fuel prices on the world market had slumped to US$134 per barrel, down from a high of US$143 per barrel.
Among some of the other requests was that of the Ministry of Agriculture –Crops and Livestock Services, which is requesting some $31.5M to meet costs associated with the purchase and resale of small packets of flour.
Increased flour prices earlier in the year forced Government to sell flour at a subsidized cost from May.
The request from the Ministry of Tourism, Industry and Commerce is to meet costs associated with cash transfers for bakers/biscuit flour.
The Ministry of Culture, Youth and Sport also requested some $11.7M to compensate for the fire at the National Cultural Centre, which is identified as a site for Carifesta events, hence emergency repairs had to be undertaken and some items had to be replaced.
Among some of the other sectors to put in requests are the Education Ministry and The Guyana Defence Force.
The monies requested will be in addition to the voted provisions in the $119B budget announced earlier this year.
  Last year, the National Assembly approved some $17B in supplementary provisions to last year’s $100B budget.
Over the years, the PNCR has been arguing on several occasions that the Government has a tendency of raiding the Contingency Fund each time it requests monies.
The argument was that ministers seeking huge sums of money should have the request accompanied with a project profile, so that the House would have a clearer understanding of what the money is to be spent on.
Finance Minister Dr Ashni Singh, who has to facilitate the provision of the funds, during the last debates that related to supplementary appropriations, noted that the current format for clarifying the funds (debates in the National Assembly) has traditionally worked and there was no need to change that approach.
Among some of the supplementary allocations during the last debates were: an allocation for $396.2 million to provide for the revision of wages and salaries, which represents an addition to the budgeted $1.8B which, according to the Finance Minister, did not cover the last announced five percent increase for teachers and the Disciplined Services.
The Agriculture Ministry had some $292M approved to meet additional expenditure for Drainage and Irrigation, $40M for the construction of pontoons to serve as a base for excavators dredging the conservancy, as well as $27M in counterpart funding.
PNCR shadow Finance Minister Winston Murray asked Agriculture Minister Robert Persaud to explain the need for an additional $292M for D&I coupled with a $400M allocation that was already made to the Drainage and Irrigation.
Murray said that this sum was in excess of what was asked for following the floods of 2005/06, and there were no floods in 2007. Persaud assured that the money was used to help the CDCs (Community Development Centres), and NDCs (Neighbourhood Development Councils) as well as water users’ associations to ensure that there was no flooding, given the extensive periods of rainfall last year.
He added that fuel was also included in that amount.
Another sum of money that met staunch opposition was a request for more than a $100M for the police force during its Christmas ‘in-lying’ period.
Minister of Home Affairs, Clement Rohee, piloted this aspect of the supplementary request.
PNCR Member of Parliament (MP) Deborah Backer immediately questioned whether Rohee did not know the routine of the Guyana Police Force during Christmas time and could not have included the funds in the budget. She described his request as poor budgeting.
Rohee defended his decision, saying that costs have escalated significantly in 2007.
The more than $26M requested for repairs to the Guyana Defence Force’s Bell 412 helicopter, which at that time was inoperable, also attracted opposition.
Minister within the Ministry of Finance, Jennifer Webster, noted that it was an economic decision to repair the downed helicopter, given that the cost of a new one would be some US$10M.
According to GAP/ROAR Member of Parliament Everall Franklin, a new Bell 412 helicopter was half the proffered amount. Further, he said, another type of helicopter could have provided the same services for the GDF.
Notable among the funds approved was a $300M sum, 70 per cent of which has been identified for the removal of asbestos at the University of Guyana.
The asbestos was once touted as critical, even attracting protests at the premier learning institution in Guyana.
The funds for the mobilisation and consultancy for the new Ministry of Labour, Human Services and Social Security were identified to the tune of $176M.
When asked why the fund was not included in the 2007 Budget, Minister of Labour, Manzoor Nadir, noted that the documentation was not completed in time for the 2007 budgetary allocation.
The building is being constructed by Kishan Bacchus Construction Company and is located where the Guyana Broadcasting Corporation once stood on High Street.
Among the provisions in the supplementary provisions for 2007 are stipend increases for Toshoas; rehabilitations to several schools;  purchase of drugs at GPHC; $636M for Government’s electricity bill; the purchase of the recently installed 10-megawatt generation capacity to complement the national grid; some $555M for construction and servicing of pontoons on the Demerara Harbour Bridge; $660M for the acquisition and installation of civil aviation equipment at the Cheddi Jagan International Airport; and funds for advance payment for the construction of the local Olympic-size swimming pool.

 

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