The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Minister of Works yesterday said his ministry needs “a lot more” money than presently allocated in next week’s Budget to address “hundreds of millions” in infrastructure needs.

Desmond Bannister, pictured, told Tribune Business that the Ministry of Works, which is responsible for all public infrastructure development, upgrades and repairs, is “hoping there will be an increase” in the projected $113-$120m capital works budget for 2018-2019.

He disclosed that his ministry was awaiting the Ministry of Finance’s response to its “projections”, but said New Providence alone required more expenditure than the Ministry’s current total budget given “what a mess the whole place is”.

“With the kinds of things we are looking to do, we hope there will be an increase,” Mr Bannister said of the Ministry of Works’ capital Budget. “Quite frankly, with the work we have to do, and revitalisation of the economy, it would be good if we got a lot more.

“We’ve made some projections to Finance, and we’ll see what they say. As you and I look around in just New Providence, you could see what a mess the whole place is. There are hundreds of millions to be put into this project.”

Despite the ever-growing demands caused by the need to improve and maintain public infrastructure on multiple islands, Mr Bannister said the Ministry of Works was not seeking an increase beyond its capacity to execute.

“The question for me is how much can my Ministry usefully spend in a year,” he explained. “Based on the capacity we have, we figure out what we can spend for useful purposes, and that’s what we’ve given to Finance. We know what we can do in a year.”

Mr Bannister declined to detail the various capital projects the Ministry of Works will target in 2018-2019, saying these will be provided in his Budget address to the House of Assembly next month.

As to whether the Government will look more to private capital and investors, and public-private partnerships (PPPs), to meet the Bahamas’ infrastructure needs, Mr Bannister replied: “That’s a question for the Ministry of Finance. I’m simply the guy who’s going to try and get things done. The Ministry of Finance makes determinations as to how its financed.

“Our question is the provision of more money. We’ve got three more years to get some serious things done, and we’re committed to getting them done. Every island.”

The Minister revealed that his capital budget for 2018-2019 was likely to be in the $113-$120 million range when he addressed the recent Eleuthera Business Outlook conference, and he warned Bahamians at the time “not everything will get done at once.”

Mr Bannister is not the only Cabinet member seeking increased budgetary financing for the upcoming 2018-2019 fiscal year, which begins on July 1. Jeffrey Lloyd, minister of education, said he planned to seek an extra $600,000 for the Bahamas Technical & Vocational Institute (BTVI) as it “ cannot meet the needs and the demands of our society here in the Bahamas”.

With the increased demand for technical and vocational graduates not yet being met through BTVI, and the demand for more persons with those skills, Mr Lloyd said his Ministry was requesting increased government funding.

Addressing a BTVI graduation ceremony, he added: “When we look at our beautiful, wonderful, talented, gifted students, this system must respond to their needs in a timely fashion.”

The two ministers’ comments illustrate the pressures facing K P Turnquest, Deputy Prime Minister and minister of finance, as he seeks to craft a Budget that balances the urgent need for the Government to achieve its fiscal consolidation targets without cutting too deeply in critical areas.

While the former Christie administration sought to hold its capital spending flat at $240 million per year, the Minnis government has achieved its first-year deficit reduction solely through cuts in this area - which is largely comprised of the Ministry of Works’ budget.

Mr Turnquest previously told Tribune Business it was “fair enough” to say that the Government was having difficulty bringing its fixed costs under control, with the near-32 per cent reduction in its 2017-2018 first-half deficit stemming entirely from cuts to the Budget’s capital spending side.

He conceded that this was not ideal, given that capital projects are designed to upgrade vital infrastructure and deliver long-term value for the Bahamian people, but pledged that the Minnis administration would “make up ground” in this area when it unveils the 2018-2019 Budget in May.

While there was a $92.3 million year-over-year reduction in the first-half GFS deficit to $198 million, the Deputy Prime Minister conceded that this “largely reflected” the 50 per cent slash in capital spending.

This fell from $152.2 million in the same period in 2016-2017 to $75.8 million for the six months to end-December, representing a $76.4 million reduction, although some of the prior year’s figure related to Hurricane Matthew restoration.

While capital spending is easier to cut and control, hence the Government’s focus in this area, Mr Turnquest said it was conscious that long-needed infrastructure upgrades could not be starved of capital for long.

The International Monetary Fund (IMF) reiterated similar sentiments in its recent Article IV report, which called on the Bahamas to make a further $240 million “adjustment” to bring its fiscal deficit in line with the 0.5 per cent of GDP goal set in the Fiscal Responsibility Bill.

“Staff urged the authorities to identify measures to undertake this adjustment with a strong focus on reducing current spending and avoid an undue compression of capital spending,” the IMF said.