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The Government which is woefully short on cash to fund its many projects has been forced to seek a loan from the National Housing Trust (NHT).
In a statement Thursday night, Prime Minister Bruce Golding said a $500 million loan is needed to boost the Government's drought alleviation programme.
According to Mr. Golding, the Government sought a loan from the NHT in a bid to respond more effectively to the prolonged drought that has affected most areas of the country.
The Prime Minister noted that the move was prompted by an estimate presented to Cabinet by the Water and Housing Minister for the repair of certain wells and the acquisition of water trucks to provide emergency supplies to badly affected communities, schools and hospitals.
Loan to be repaid over 5 years
In his statement, Mr. Golding also noted that the estimated $477 million price tag was too much of a burden for the Government purse and as such, Water and Housing Minister, Dr. Horace Chang, was advised to seek to negotiate an interest-bearing loan from the NHT.
The loan is to be fully covered by a Government guarantee and will be repaid over 5 years.
Mr. Golding said the advice of the Solicitor-General has also been sought in the matter.
He argued that in its normal course of business, the NHT invests a significant portion of its cash reserves in Government paper, which is in effect, a loan to the administration.
The Prime Minister added that against this background, a special loan to deal with drought alleviation is no different in principle except for the rate of interest applied when compared to that which obtains on Government paper.
Different approach from the PNP
In his statement, the Prime Minister also defended his administration's decision to seek assistance from the NHT.
He said his administration's approach is far removed from that of the Opposition People's National Party (PNP) when it formed the Government.
According to Mr. Golding, the PNP administration, on more than one occasion, extracted billions of dollars from the NHT to finance various projects without any intention or requirement for these funds to be paid back to the housing agency.
He chided Opposition leader Portia Simpson Miller for what he called her misplaced indignation.
Mr. Golding charged that the politically-motivated directions which her administration had issued to the NHT caused the agency to record a loss of $600 million in 2008, for the first time in its history.
He reiterated that action taken by his government to reduce the operating costs and increase mortgage rates at the higher income levels, resulted in the NHT being returned to good financial health.
Mr. Golding said this was evidenced by the re-energization of the NHT's programme of providing housing benefits to contributors with over 11,000 mortgage loans valued at over $20 billion dollars being issued since April 1, 2008.
http://www.radiojamaica.com/content/view/24161/26/
In a statement Thursday night, Prime Minister Bruce Golding said a $500 million loan is needed to boost the Government's drought alleviation programme.
According to Mr. Golding, the Government sought a loan from the NHT in a bid to respond more effectively to the prolonged drought that has affected most areas of the country.
The Prime Minister noted that the move was prompted by an estimate presented to Cabinet by the Water and Housing Minister for the repair of certain wells and the acquisition of water trucks to provide emergency supplies to badly affected communities, schools and hospitals.
Loan to be repaid over 5 years
In his statement, Mr. Golding also noted that the estimated $477 million price tag was too much of a burden for the Government purse and as such, Water and Housing Minister, Dr. Horace Chang, was advised to seek to negotiate an interest-bearing loan from the NHT.
The loan is to be fully covered by a Government guarantee and will be repaid over 5 years.
Mr. Golding said the advice of the Solicitor-General has also been sought in the matter.
He argued that in its normal course of business, the NHT invests a significant portion of its cash reserves in Government paper, which is in effect, a loan to the administration.
The Prime Minister added that against this background, a special loan to deal with drought alleviation is no different in principle except for the rate of interest applied when compared to that which obtains on Government paper.
Different approach from the PNP
In his statement, the Prime Minister also defended his administration's decision to seek assistance from the NHT.
He said his administration's approach is far removed from that of the Opposition People's National Party (PNP) when it formed the Government.
According to Mr. Golding, the PNP administration, on more than one occasion, extracted billions of dollars from the NHT to finance various projects without any intention or requirement for these funds to be paid back to the housing agency.
He chided Opposition leader Portia Simpson Miller for what he called her misplaced indignation.
Mr. Golding charged that the politically-motivated directions which her administration had issued to the NHT caused the agency to record a loss of $600 million in 2008, for the first time in its history.
He reiterated that action taken by his government to reduce the operating costs and increase mortgage rates at the higher income levels, resulted in the NHT being returned to good financial health.
Mr. Golding said this was evidenced by the re-energization of the NHT's programme of providing housing benefits to contributors with over 11,000 mortgage loans valued at over $20 billion dollars being issued since April 1, 2008.
http://www.radiojamaica.com/content/view/24161/26/
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