OfReg’s ICT executive Alee Fa’amoe has said, based on the regulator’s current operational trajectory, it will be not be able to meet its mandate of getting better prices at the gas pump nor faster internet speeds and prices within the next year or two.
He made the admission Thursday as he responded to questions from Bodden Town West MLA Chris Saunders when he appeared before the Public Accounts Committee.
Fa’amoe, when questioned by Prospect MLA Austin Harris on the slow internet speeds experienced in various parts of Grand Cayman, especially the eastern districts, admitted that the regulator has to share blame with the internet providers.
“We need to be more aggressive and more forceful in the enforcement of the regulations,” he said.
OfReg’s executives were called before the committee to address the findings of Auditor General Sue Winspear’s report into its effectiveness and its ability to deliver on its mandate.
The report, ‘Efficiency and Effectiveness of the Utility Regulation and Competition Office (OfReg) – June 2020’, found that OfReg’s first three years in operation have been plagued by a lack of strategic planning, little oversight and inconsistent leadership.
OfReg Chairman Linford Pierson, during his testimony before the committee Wednesday, took issue with the report, citing a lack of consultation and factual inconsistencies.
On Thursday, PAC chairman Ezzard Miller asked Winspear to provide a report to the committee with supporting documentation, including details of which OfReg officials had been interviewed.
Miller, Harris and Saunders picked apart the organisational structure of the regulator and its perceived failings, especially when it came to addressing issues such as the delay in passing on savings to the consumers following the significant drop in global fuel prices in recent months.
Saunders questioned whether it was time to reset the regulation of utilities in Cayman and return to the individual monitoring entities that were amalgamated to form OfReg.
“We saw from the auditor general’s report that the synergies and everything else that should have been realised from OfReg, three-plus years in, have not been realised,” Saunders said.
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OfReg was created through the merger of the Electricity Regulatory Authority, the Information and Communications Technology Authority, the Petroleum Inspectorate and part of the Water Authority in 2017 and since then it has been plagued with management conflicts and financing challenges.
During the last Finance Committee meeting, there was a call to defund the regulator since it was not reaching its objectives. Government directly funds OfReg.
Fuel prices a continuing challenge
OfReg’s fuels executive Duke Munroe said the issue of fuel prices is a priority for the regulator, and the lack of reduction of prices at the pump when global prices dropped was a matter of concern.
Munroe said an investigation has been launched into why Cayman consumers did not receive the savings at the pump immediately.
“We’ve said to them (local fuel providers) we are very concerned that you have not passed on the level of reduction that’s required, and we need information. In the process of providing us this information… they took the decision to actually reduce the price at the pump,” he said.
Munroe has said the long-awaited assessment of Cayman’s fuel market suffered setbacks due to the COVID-19 pandemic.
However, Munroe, appearing before the Public Accounts Committee Thursday morning, said work on the assessment is nearing completion.
“We are finalising the paper… the study, so I would say within two months we will be wrapping up that exercise, which I explained earlier was faced with some setbacks due to COVID, so we will be completing that current markets assessment to make our recommendation to government on the way forward.”
The Fuel Market Definition and Economic and Regulatory Assessment, which is being conducted by Economic Partners Limited, a Hong Kong-based consulting firm, is expected to define the fuels market and identify the products in the sector and how the market behaves. It commenced in October and was expected to be completed in six months.
Saunders said the “fuel market is something we very much need to reign in”, adding that this was a long-standing problem for local consumers.
Munroe is set to appear before the PAC next week to continue his testimony.