He may have received a “positive response from the UK government” regarding a proposal to purchase 1,500 solar panels for the homes of lower income families, but Cayman Islands Premier McKeeva Bush will likely have to obtain a more formal agreement for the $15 million needed to proceed with that programme.
United Kingdom representatives said Wednesday that Mr. Bush had mentioned such a plan last week while UK Overseas Territories Minister Henry Bellingham was in Cayman.
“But no formal request for borrowing has been made at this stage,” said Tom Hines, a spokesman for Cayman Islands Governor Duncan Taylor’s office. Premier Bush said earlier in the week that details of how the budget would finance such a programme were still to be worked out.
“If it’s $15 million I have to borrow to fund the programme, the United Kingdom, I think, will look favourably on it,” he said.
The UK government has forbidden Cayman from borrowing in either the current budget or the upcoming 2012/13 budget “unless in exceptional circumstances, different arrangements are agreed in writing by the Cayman Islands government and the [UK] secretary of state”, according to the Framework for Fiscal Responsibility agreement signed by Premier Bush last year.
There are two general exceptions to the borrowing ban.
One is if the proposed project would yield sufficient revenues to fund the debt payments required; another is if the government can demonstrate it has sufficient surplus to pay for the borrowing.
According to the latest estimates, Mr. Bush – who is also the territory’s finance minister – has said the Cayman Islands central government would “break even” at the end of the 2011/12 budget year on 30 June. However, those estimates from the Ministry of Finance were contingent upon the divestment of the Cayman Islands sewerage system assets by the end of the budget year.
The assets have been valued at more than $19 million. If the divestment doesn’t happen, government could be down another $19.4 million by the end of the year.
Governor Taylor has said it was “unrealistic” to believe a credible business plan could be formulated and that a bidding process for the divestment might be accomplished within the next two-and-a-half months before the end of the budget.
Debt
Government financial records show the Cayman Islands almost reached the legal requirement for cash reserves in the current budget, having 87 days worth rather than the required 90 days.
However, it is somewhat farther from meeting legally required limits for paying off debt and for overall debt limits as compared with revenue.
According to budget records, Cayman’s “net debt” – the government’s total debts as compared with revenues – was estimated at 108 per cent for the current 2011/12 budget year. According to the Public Management and Finance Law, the Cayman Islands should maintain a “net debt” ratio of 80 per cent when compared with its revenues.
Government estimates show the Cayman Islands’ total public sector debt will remain well above $500 million by mid-2014, despite payments of more than $30 million per year until then.
During his budget address the previous summer, Premier Bush said, as of 30 June, 2011, Cayman’s public sector debt was expected to reach nearly $626 million (about US$726 million).
The territory’s net worth was expected to be $485.6 million at that same time. By the end of the current budget year on 30 June, 2012, Premier Bush said public sector debt should have dropped to $599.3 million.
Related Videos
Would likely be cheaper and much simpler for the government to subsidize or pay completely the electricity bills for the lower income families.
Well that’s that then, the UK will never lend on such a hair brained scheme. Sure if it were a solar power station that was properly maintained that offered discounts to the low income earners why not but this will not work and if it ever went ahead would end up costing the government more than 15million in maintenance.
The idea should be to lessen our national dependency on fossil fuels which is not renewable and as quickly as possible apply Sustainable/renewable energy into our lifestyle.
Government started this when they made solar panels and associated equipment duty free, to continue this effort by offering low income home-owners subsidized panels has to be a win/win for the citizen and government..
The government’s business case which would require to show good value for money and favorable returns on expenditures, would have assessed these individual with a view of avoiding future cases of state issued welfare. Also this program will invigorate a much needed business which will be essential to these islands in the provision of solar technology as we continue to go green.
Mr Bush should exert his authority to move every government office possible into the new government building, avoiding waste must come before borrowing.
Don’t you think that more information about this project should be made public? The cost and quality of solar panels varies immensely. What is the government getting for the 15M? Are the systems warrantied? Hurricane resistant? Theft resistant? What provisions have been made for maintenance of the systems? Are Caymanian companies involved in the project? Has there been a bidding process to ensure that we are getting the absolute most for our money?
It seems like the Government is putting forward and idea that in theory is a good one, but in practice? Hmmmm. It is one thing to dress up a dolly, quite another to make her walk and talk.
The Government says here you go, a program to support sustainable energy among people who most need the help. Now all the Opposition wants to do, in the Government’s opinion, is tear it down.
At the end of the day, the Government has a mandate from the people to continue to collect the revenue off the fuel surcharge paid by CUC, so they will take with one hand and give back with the other!
so…. at the same time that he is proposing that we dredge the Brac pond, McKeeva is trying to encourage environmental responsibility with solar panels?
what ever happened to that oil rig?
I said it before and I will say it again,
Why doesn’t the Cayman Government set up their own solar powered electric generating plants and supply whoever they see fit to receive subsudizied electric while supplying regular electric to everyone else and profit from this venture.
Do we need more money in the Government coffers?
Why is everything done backwards on this island?
This proposal illustrates everything that is wrong about the two party system. Wasting borrowed money to buy votes. Goodness. It makes no business sense what so ever. Cayman needs a return to the Statesmen of the past who where about what is best for Cayman. The current powers that be are all about getting reelected no matter the cost to the financial health of the country. Everyone needs to understand that the government can not be allowed to live beyond its means. It will be the ruin of Cayman if it is not halted. The U.S. can wastefully spend and run budget deficits because they can always print the money to pay the debt. Cayman can not do that. Look at what is happening in Greece and Spain. The riots. That’s what happens when governments are forced to become fiscally responsible. They do it on the backs of the people. They call it ‘austerity’. Fix it while it can still be fixed is my message.