BY
BALFORD HENRY Observer writer
Kingston,
Jamaica -- GOVERNMENT plans to spend about US$105 million (J$6.8
billion) to make preparations for hosting some of next year's International
Cricket Council (ICC) World Cup matches, but the country is expected
to earn only US$9 million in revenue from the event, Finance Minister
Omar Davies disclosed.
According to Davies, the decision by Caribbean Community (Caricom)
heads of government to host the event was taken on the basis of
the additional benefits expected to come to the region and not "in
terms of straight economic and financial analysis".
The finance minister was speaking at the meeting of the Standing
Finance Committee of the House of Representatives, in response to
questions from Opposition Leader Bruce Golding about the wisdom
of investing so much money in the Cricket World Cup, when there
are so many other areas of the economy in need of financial support.
Davies also told parliamentarians reviewing the 2006/07 estimates
of expenditure that Jamaica was not the only country which was now
realising the full implications of the costs of hosting the event,
and said that the country could end up with additional games as
Guyana was having problems meeting its obligations.
In the meantime, Audley Shaw, the Opposition spokesman on finance,
noted that the allocations for the preparations for hosting Cricket
World Cup 2007 in this year's estimates added up to just over J$5.8
billion so far.
"How will this expenditure be recovered?" asked Shaw.
"Has there been any sort of projection of value for money considerations,
and what really is expected by way of the out-turn from that one
month of concentrated activity?" "It is in the order of
US$100 million, so you are in the ball park," Davies responded.
"Take Greenfield, take Sabina, take land acquisition, take
health, security. So it's in that area. It's what you see in the
budget and a little more and if you add what we spent last year,
also in terms of payments."
Davies, however, denied suggestions from Opposition MP Ed Barlett
that the figure for Jamaica was more like US$180 million of the
US$580 million cost to the region for staging the event. But he
said that in addition to the US$100 million, there were projected
contingencies of US$5 million (J$325 million).
Davies said that there would be no revenue to compensate for the
level of expenditure. "We would have to see those as investments
in national assets, as well as the indirect benefits in terms of
publicity. But there certainly won't be revenues to the equivalent
of US$105 million," he said.
"In terms of the projections, the numbers I have seen in the
first instance, in terms of actual cash back, would be in the region
of about US$9 million in terms of sale of the boxes, etcetera. “Then,
over time, a percentage of the rental will come back. But it is
not an expenditure which will be covered by the revenues,"
Davies said, in response to a question from Golding about expected
revenue to the Consolidated Fund.
Golding also asked what sort of revenues were expected to flow into
Jamaica from the staging of the event. "I have looked at what
happened in South Africa, I have looked at the numbers and. I am
not overwhelmed," Davies admitted.
Golding also wanted to know what the government proposed to do with
the Greenfield stadium in Trelawny after the Cricket World Cup.
Davies responded that there was a proposal to invite bids to operate
the complex. He added: "I proposed, and it has been accepted,
that we have a plan B."
He told parliamentarians that the Plan B was to accept that, "if
nothing acceptable comes forward from those bids,. we operate it
(the Greenfield stadium) as part of the national sporting assets,
like the National Stadium".
However, he said an asset like the US$35 million Greenfield stadium
could quickly go down the drain unless it was maintained. US$30
million (J$1.9 billion) of the cost is covered by a concessionary
loan at an interest rate of three per cent from the People's Republic
of China, which will only finance the construction. But Golding
was still not satisfied.
"Given the kinds of pressure that we are under fiscally, given
the fact that we have, for example, an education transformation
programme that we have all signed off on, but which we can't travel
very fast with because we don't have the money, do you think that
Jamaica is in a position to afford the cost of hosting Cricket World
Cup?" Golding asked.
"The hard answer to that question is that the decision was
not taken in terms of strict financial analysis," Davies repeated.
|
