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BY INGRID BROWN Observer senior reporter browni@jamaicaobserver.com
Friday, December 09, 2011
PRIME Minister Andrew Holness said a major thrust of a new government led by him will be a public/private partnership (PPP) aimed at divesting loss-making entities to the private sector.
"Going forward the Government will be looking carefully at all its operations and we will be moving significantly to take them off our books and find a way to incorporate the private sector in the service provision, in the capital development and in the management of the services and goods that the government provides for its citizens," Holness said.
Prime Minister Andrew Holness (right) in discussion with CEO of GraceKennedy, Don Wehby at Thursday’s Private Sector Organisation of Jamaica Christmas luncheon at the Wyndham Kingston Hotel.
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According to Holness, "this is the only way, given the environment we have" that the government would have to proceed.
However, the prime minister made it known that this would be done in a clear well-managed framework, both policy and regulatory.
"We want to move into PPPs in a significant way but before we do that we will lay down the ground rules clearly so that all who want to participate will understand what it is they are expected to deliver, the sanctions for failure and the incentives that the government will give to participate," Holness said.
He reiterated that the Government would set clear ground rules to include the incentives as well as the sanctions.
Holness, who was addressing the Private Sector Organisation of Jamaica's (PSOJ) Christmas luncheon at the Wyndham Hotel in Kingston Wednesday, said Government should only be involved in those services the private sector cannot provide.
As such, he said, a model can be found to either contract out services, facilitate the provision of services or pay for services through taxes under a public private partnership. "And as far as possible the new Government will be pursuing this," he said.
But Holness said PPPs, while presenting significant opportunities if not properly managed could present significant challenges to the Government.
"So I am a big supporter of PPPs but I am also very cognisant that the very thing you are trying to avoid, which is an increase in government expenditure, that you could find yourself increasing government expenditure while undertaking PPPs," said Holness.
Private sector operations, he said, would be more suited for most of the provisional goods and services than public sector operations. As such, he said, the Government believes in free enterprise.
"We will be stepping out of your way; we will be saying to you take these operations over and we intend to watch Jamaica grow with an active participating energetic private sector," Holness told the PSOJ members to much applause.
Noting that the Government is not pursuing a policy with its eyes closed, Holness said he has experience in using PPPs in education through the building of schools. With overruns being a constant feature of Government-managed school building projects, Holness pointed to how PPPs could address this.
Another form of PPP being pursued, according to Holness, is the school feeding programme. With Government now owning the factories which provide school lunches, the prime minister questioned if this is a service the administration should be in.
He said when checks were made to contract the provision of school lunches it was discovered that operating cost in government was almost one a half times that of private production. He said the plan is to divest the assets of Nutrition Products Limited, however, a minimum service agreement will be set to ensure all students are served equally and up to standard.
The PPP, said the prime minister, is a shifting of the risk but insisted that the private sector is better able to manage this risk.
"It is a different approach in business when you are managing your own funds and you realise the clear and present danger of a bad decision," he said.
The prime minister said the challenge could be that overseas investors with experience in PPP will come to the table faster than local investors. "I want to encourage the local private sector to take a risk on Jamaica," he said, adding that he wants to provide them with a long period of stability.
Read more: http://www.jamaicaobserver.com/news/...#ixzz1g2dCfQGJ
Friday, December 09, 2011
PRIME Minister Andrew Holness said a major thrust of a new government led by him will be a public/private partnership (PPP) aimed at divesting loss-making entities to the private sector.
"Going forward the Government will be looking carefully at all its operations and we will be moving significantly to take them off our books and find a way to incorporate the private sector in the service provision, in the capital development and in the management of the services and goods that the government provides for its citizens," Holness said.
Prime Minister Andrew Holness (right) in discussion with CEO of GraceKennedy, Don Wehby at Thursday’s Private Sector Organisation of Jamaica Christmas luncheon at the Wyndham Kingston Hotel.
1/1
According to Holness, "this is the only way, given the environment we have" that the government would have to proceed.
However, the prime minister made it known that this would be done in a clear well-managed framework, both policy and regulatory.
"We want to move into PPPs in a significant way but before we do that we will lay down the ground rules clearly so that all who want to participate will understand what it is they are expected to deliver, the sanctions for failure and the incentives that the government will give to participate," Holness said.
He reiterated that the Government would set clear ground rules to include the incentives as well as the sanctions.
Holness, who was addressing the Private Sector Organisation of Jamaica's (PSOJ) Christmas luncheon at the Wyndham Hotel in Kingston Wednesday, said Government should only be involved in those services the private sector cannot provide.
As such, he said, a model can be found to either contract out services, facilitate the provision of services or pay for services through taxes under a public private partnership. "And as far as possible the new Government will be pursuing this," he said.
But Holness said PPPs, while presenting significant opportunities if not properly managed could present significant challenges to the Government.
"So I am a big supporter of PPPs but I am also very cognisant that the very thing you are trying to avoid, which is an increase in government expenditure, that you could find yourself increasing government expenditure while undertaking PPPs," said Holness.
Private sector operations, he said, would be more suited for most of the provisional goods and services than public sector operations. As such, he said, the Government believes in free enterprise.
"We will be stepping out of your way; we will be saying to you take these operations over and we intend to watch Jamaica grow with an active participating energetic private sector," Holness told the PSOJ members to much applause.
Noting that the Government is not pursuing a policy with its eyes closed, Holness said he has experience in using PPPs in education through the building of schools. With overruns being a constant feature of Government-managed school building projects, Holness pointed to how PPPs could address this.
Another form of PPP being pursued, according to Holness, is the school feeding programme. With Government now owning the factories which provide school lunches, the prime minister questioned if this is a service the administration should be in.
He said when checks were made to contract the provision of school lunches it was discovered that operating cost in government was almost one a half times that of private production. He said the plan is to divest the assets of Nutrition Products Limited, however, a minimum service agreement will be set to ensure all students are served equally and up to standard.
The PPP, said the prime minister, is a shifting of the risk but insisted that the private sector is better able to manage this risk.
"It is a different approach in business when you are managing your own funds and you realise the clear and present danger of a bad decision," he said.
The prime minister said the challenge could be that overseas investors with experience in PPP will come to the table faster than local investors. "I want to encourage the local private sector to take a risk on Jamaica," he said, adding that he wants to provide them with a long period of stability.
Read more: http://www.jamaicaobserver.com/news/...#ixzz1g2dCfQGJ