$332M in capital projects planned

The Government’s 2007/08 Strategic Policy Statement laid in the Legislative Assembly Friday includes a CI$332.2 million capital development programme over the next three years.

Leader of Government Business Kurt Tibbetts said a combination of cash from operating surpluses and some CI$300.3 million in borrowings will be used to fund the capital expenditures.

The 2006/07 Strategic Policy Statement envisioned a CI$235 million four-year capital spending programme, and CI$182 million of borrowing during that time.

The loans will not take the Government over its maximum 10 per cent borrowing ration as prescribed by the Public Management and Finance Law, Mr. Tibbetts said.

‘As is to be expected with the level of new borrowing allowed for in the targets, this ratio rises steadily across the three-year forecast horizon, reaching 9.9 per cent in 2009/10, which is still below the maximum limit allowed under the PMFL,’ he said.

However, Mr. Tibbetts said the updated 10-year projections in the Strategic Policy Statement do show a small level of non-compliance to the PMFL for two years in the future.

‘We will be able to achieve full compliance with the principles of responsible financial management in all but two years when we are projecting very minor non-compliance with the borrowing ration in 2010/11 and 2011/12 when the rations are projected to be 0.3 per cent and 0.1 per cent above the ten per cent mandated by the Public Management and Finance Law.’

Mr. Tibbetts called the level of borrowing ‘affordable and responsible’ and said it was necessary to satisfy the country’s infrastructure needs.

‘We have found ourselves in frightening circumstances with regard to procrastination in our infrastructure needs,’ he said. ‘Every one of the (infrastructure) projects… is very high on our priority list.’

Mr. Tibbetts outlined some of the needed infrastructure projects, which he said included three new high schools; the rebuilding of George Town Primary School; the first Government accommodation project to be built next to the Glass House; a new judicial courts building; a new police station in West Bay; a new civic centre in Bodden Town as well as the refurbishment of the existing civic centre in that district; a new fire station and a new police station in Bodden Town; and a main fire station on the bluff in Cayman Brac, which could have a police station on the same property.

In addition, the Government is beginning the east-west arterial highway, the first phase of which will run between Newlands and Red Bay.

Mr. Tibbetts also discussed revenue measures.

In the 2006/07 Strategic Policy Statement, the government announced that it expected to need CI$28 million in revenue enhancements in the 2006/07 and 2007/08 financial years. It envisioned needing CI$25 million for the current financial year, but only implemented $23.3 million.

Mr. Tibbetts said that for the 2007/08 financial year, the Government might have to implement the difference between the originally estimated $25 million for 2006/07 and the $23.3 actually implemented, but said the revenue measures would not surpass the $28 million over the two financial years. If that is the case, the country could see a maximum of CI$4.7 million in new revenue measures announced in the next Budget.

There could be some additional revenue measures the following year as well.

‘Based on the forecasts, the Government may have to introduce a relatively minor adjustment in 2009/10, but only if absolutely necessary to ensure that the operating surplus targets are maintained and cash flow is generated to maintain the cash reserve targets and supplement the capital development programme,’ Mr. Tibbetts said.