Don’t throw fetes while owing millions, Ameen tells corporations

KEVON FELMINE

Se­nior Re­porter

[email protected]

“Don’t throw a fete if you are ow­ing mon­ey.”

That was the mes­sage from Min­is­ter of Rur­al De­vel­op­ment and Lo­cal Gov­ern­ment Khadi­jah Ameen yes­ter­day, as she warned mu­nic­i­pal cor­po­ra­tions bur­dened by hun­dreds of mil­lions of dol­lars in debt to pri­ori­tise set­tling ar­rears.

Ameen spoke with re­porters af­ter meet­ing may­ors, chair­men and CEOs at the San Fer­nan­do City Hall au­di­to­ri­um, where sub­mis­sions were be­ing fi­nalised ahead of the Gov­ern­ment’s mid-year bud­get re­view. She said the lo­cal gov­ern­ment sys­tem has long been strained by fi­nan­cial short­falls, with al­lo­ca­tions ap­proved in pre­vi­ous bud­gets but not re­leased.

She es­ti­mat­ed that to­tal debt across cor­po­ra­tions could reach $1 bil­lion, cit­ing the Tu­na­puna/Pi­ar­co Re­gion­al Cor­po­ra­tion alone as ow­ing $30 mil­lion to con­trac­tors for scav­eng­ing ser­vices, with le­gal cor­re­spon­dence now be­ing sent to its of­fice. Sev­er­al cor­po­ra­tions, she said, are months be­hind on pay­ments.

“Some of them are months be­hind. Some are ow­ing over $80 mil­lion, $50 mil­lion or $20 mil­lion per cor­po­ra­tion for scav­eng­ing ser­vices. This is one of the larg­er ex­pen­di­ture items, but when you add oth­er sup­pli­ers, it amounts to a tremen­dous debt. It is a dis­ser­vice that was done by the for­mer gov­ern­ment as a means of sup­press­ing fund­ing.”

Ameen said some cor­po­ra­tions ex­pe­ri­enced up to five months of fund­ing short­falls un­der the pre­vi­ous Peo­ple’s Na­tion­al Move­ment ad­min­is­tra­tion, forc­ing them to use cur­rent al­lo­ca­tions to clear old debts.

As a re­sult, she said, less work has been un­der­tak­en in the cur­rent fis­cal pe­ri­od, as re­sources were redi­rect­ed to set­tle ar­rears and sta­bilise fi­nances. The Min­istry is now re­quir­ing cor­po­ra­tions to use un­spent bal­ances to ad­dress out­stand­ing li­a­bil­i­ties be­fore con­tin­u­ing re­lat­ed ser­vices.

“So we are say­ing, do not throw a fete if you know you are ow­ing mon­ey. Let us try to set­tle. Some of our re­la­tion­ships with busi­ness­es in com­mu­ni­ties have suf­fered be­cause sup­pli­ers were not be­ing paid. We have been man­ag­ing the debt and have cov­ered a num­ber of projects from pre­vi­ous years—not just the year be­fore we came in­to gov­ern­ment, but even three and four years pri­or.”

Look­ing ahead, Ameen said the Min­istry will fac­tor in in­creased Na­tion­al In­sur­ance Scheme con­tri­bu­tions and wage ad­just­ments aris­ing from the re­cent­ly signed agree­ment be­tween the Na­tion­al Union of Gov­ern­ment and Fed­er­at­ed Work­ers and Chief Per­son­nel Of­fi­cer Dr Daryl Din­di­al, al­though for­mal com­mu­ni­ca­tion has not yet been re­ceived.

She added that vire­ments are al­so be­ing con­sid­ered to help clear out­stand­ing bal­ances.

Be­yond debt man­age­ment, Ameen out­lined a se­ries of struc­tur­al re­forms aimed at im­prov­ing over­sight and ef­fi­cien­cy with­in re­gion­al bod­ies. She said the min­istry is stan­dar­d­is­ing hu­man re­source man­age­ment and strength­en­ing pro­cure­ment sys­tems, not­ing that when she as­sumed of­fice, there was no pro­cure­ment of­fi­cer with­in the min­istry.

“I would re­al­ly like to know what the min­istry and the for­mer min­is­ter of lo­cal gov­ern­ment were do­ing with­out a pro­cure­ment of­fi­cer while mil­lions of dol­lars were be­ing spent.”

She said Cab­i­net has since ap­proved the es­tab­lish­ment of a pro­cure­ment unit, which will pro­vide each cor­po­ra­tion with a pro­cure­ment of­fi­cer and ad­min­is­tra­tive sup­port.

Ad­di­tion­al ini­tia­tives in­clude the cre­ation of a pub­lic health man­age­ment unit to co­or­di­nate scav­eng­ing ser­vices, lit­ter pre­ven­tion war­dens and drain clean­ing, as well as a Lo­cal Eco­nom­ic De­vel­op­ment Unit to help cor­po­ra­tions gen­er­ate rev­enue.

“A lot of them have prop­er­ty that they could utilise to bring rev­enue, while al­so stim­u­lat­ing the lo­cal econ­o­my and pro­vid­ing spaces for en­tre­pre­neurs.”

Ameen said sev­er­al cor­po­ra­tions have al­so ex­pressed in­ter­est in de­vel­op­ing ad­min­is­tra­tive com­plex­es, par­tic­u­lar­ly where cur­rent of­fices are housed in sub­stan­dard rental fa­cil­i­ties.

“I have cor­po­ra­tions housed in rental build­ings that are in poor con­di­tion. Roofs are leak­ing, and CEOs have to cov­er their desks when it rains, yet we are pay­ing rent for these spaces. We are mov­ing to­ward a com­pre­hen­sive pro­gramme where the Gov­ern­ment will work with cor­po­ra­tions that have land—some have al­ready iden­ti­fied sites—to de­vel­op prop­er ad­min­is­tra­tive com­plex­es.”

Guardian Me­dia con­tact­ed sev­er­al Peo­ple’s Na­tion­al Move­ment chair­men and may­ors for com­ment but none re­spond­ed up to press time.