Premier Meade Delivers Address @ 43rd Annual (CDB) Board Of Governors’ Meeting

The Hon. Premier Meade acting in the capacity of governor of the British Overseas Territories: Anguilla, British Virgin Islands, Turks and Caicos Islands, and Montserrat delivered this address at the opening ceremony of the 43rd Annual Meeting of the Board of Governors of (CDB) Caribbean Development Bank held in St. Lucia:

43rd Meeting Of CDB Board Of Governors (Opening Statement By Premier Meade) in St. Lucia

The conference is held prior to the start of the hurricane season which is June 1 to enable all government agencies and community groups to have their emergency plans finalised and to get a full picture of how prepared everyone is.

Presentations will be given on the predictions for the season; DMCA’s preparedness; Peripheral Threats such as road, water supply and agency planning; and communications systems training.

There will be breakout sessions to aid in the finalisation of hurricane plans.

DFID Review Team ( left to right) Alan Clarkin, Tom Kelly, and Kato Kimbugwe.

BRADES, Montserrat – Montserrat received an improved rating following the end of the final review of the Strategic Growth Programme from DFID but has work to do in several key areas including tax reforms.

According to a statement from the Department for International Development (DFID), the government “sustained its commitment to the reforms process since the mid-term review reported in October. Good progress has been made in meeting February 2013 targets in most areas. The team recognises that some elements of the MoU reform process will need time to be embedded in GoM Departmental work plans.”

The report highlighted work in the areas of Investment policy, Tourism, and access as successful.

“Good progress can be reported on outsourcing but GoM should ensure that implementation plans are consistent. The review team asked GoM to set out an action plan to secure a postal code system for Montserrat by August 2013,” the report noted.

DFID said that performance has been below expectations in the following areas: Tax reforms, Review of regulatory functions; and Institutions.

“Faster progress on regulatory planning and on tax reforms is an urgent priority. The review team requested an action plan to be set out by end June for regulatory enhancements, drawing on regional institutions and work already in train at the regional level. We underlined the importance of clear plans in this area given upcoming investments in geothermal, fibre-optic and access. In the area of tax, we asked for ToR for an action plan to be delivered by 24 May. This plan needs to be delivered by August 2013. Appropriate social policy assessments need to be factored into this work.

The review team said they “were pleased at how GoM has stepped up its efforts on communicating the purpose of the MoU reforms since October. This was recognised by representatives from the private sector with whom the review team consulted. They also noted that the Montserrat Development Corporation (MDC) was developing economic and financial models that will provide a clear picture of the benefits to GoM from prospective investments in Little Bay and Carr’s Bay investments. Further technical support will be needed to underpin this work.”

They also found evidence that the MDC was working hard to engage with prospective investors for a new port and landside developments. Investment proposals need to be considered carefully, including how any concessions compare to investment schemes offered in the UK.

The review was conducted from May 15 to 21, with the DFID team comprising of Tom Kelly, Kato Kimbugwe, Alan Clarkin. The met with government and department heads to discuss a range of issues related to investment and immigration policy, environmental management, access and communications. Meetings were also held with members of the private sector and the Opposition.

The SGP came about as a result of the Memorandum of Understanding which was signed between Montserrat and the UK in May 2013. In order for Montserrat to receive considerable financial support for development projects such as the new town, port and geothermal the government needed to make reforms in several key areas to make the island more attractive for investors and also to offer better value for money in its delivery of services.

To learn more about the SGP and the reforms, visit www.gov.ms/movingforward.

The settlement will enable continued provision of essential services, including assistance across health, education services and improving sea access and safety at the airport for the 2013/14 financial year.

The increased financial injections come as a result of GoM’s submission of significant budget pressures arising from capital replacement costs, rising pension costs and on-going financial liabilities. DFID has increased funding across these areas to address these pressures.

In summary the budget settlement includes the following;

i. EC$57.3m for the recurrent budget – increased from EC$52m in 2012/13
ii. EC$2m to meet critical gaps in public services
iii. EC$3m to settle GoM outstanding financial liabilities
iv. Pension costs increased to EC$1.3m
v. Improvements to sea and air access increased by EC$1.5m. Further funding to improve sea and air access should provide an enabling environment for business activity.
vi. New funding of EC$1.8m to set up a new capital replacement budget
vii. New funding of EC$1m to strengthen the Audit function
viii. Improve governance by providing an office for the Opposition.

DFID said its “continued commitment to Montserrat is reflected in the budgetary increase. This budget settlement provides GoM with a strong financial footing for the 2013/14 fiscal year. It clears outstanding liabilities, invests in the public sector and strengthens governance.

Photo Caption: Whit Monday press conference to announce approved Budget Support for 2013/14 with DFID officials and Ministers from the Government of Montserrat.

United Kingdom Prime Minister David Cameron

BRADES, Montserrat – The Honourable Premier Reuben T. Meade has been invited along with heads of all Overseas Territories and Crown Dependencies to a meeting with Prime Minister David Cameron to discuss tax transparency.

In a letter with themed “The G8 and tax and Transparency,” Cameron said he is looking to all the Overseas Territories and Crown Dependencies to continue to work in partnership with the UK on tax information exchange and beneficial ownership. “I have made fighting the scourge of tax evasion and aggressive tax avoidance a priority for the G8 Summit, which the UK is hosting next month. With one month to go, this is the critical moment to get our own houses in order.”

The prime minister has invited Meade and other heads to attend the June 15 meeting on tax, trade and transparency, to “showcase the progress” they have made. “This is a real opportunity to set the global standard on transparency – and I am confident the Overseas Territories and Crown Dependencies will rise to the challenge.”

“I have said before that I want to see the Overseas Territories and Crown Dependencies flourish, and I respect your right to be lower tax jurisdictions. I believe passionately in lower taxes as a vital driver of growth and prosperity for all. But lower taxes are only sustainable if what is owed is actually paid – and if the rules to achieve this are set and enforced fairly to create a level playing field right across the world. There is no point in dealing with tax evasion in one country if the problem is simply displaced to another,” the prime minister explained.

He welcomed the commitments made in recent weeks by the OTs comply with FACTA policy on automatic tax information exchange, both on a bilateral and multilateral basis. This, he said “will help us to reach our goal of setting a global standard in tax transparency. There is a critical mass building. Last week’s European Finance Ministers meeting showed that the EU is getting on board. And I hope others around the world will follow the lead we are setting together. “

“We also need to ensure information exchange works effectively for all, particularly the poorest countries in the world. That is why we strongly support the Multilateral Convention on Mutual Assistance in Tax Matters. I know many of you have been considering joining and I ask you all to commit to do so in the run-up to the G8 Summit.

“But dealing with tax evasion is not just about exchanging information. It is also about improving the quality and accuracy of that information. Put simply, that means we need to know who really owns and controls each and every company. This goes right to the heart of the ambition of Britain’s G8 to knock down the walls of company secrecy.

The prime minister acknowledged that some territories are leading the way with public commitments to produce Action Plans on beneficial ownership and encouraged others to do the same quickly. “Getting the right content in these plans will now be critical. These will need to provide for fully resourced and properly managed centralised registries, that are freely available to law enforcement and tax collectors, and contain full and accurate details on the true ownership and control of every company.

According to PWD Director Ron Beardsley, drilling of the geothermal well references as Mon-01 has reached a depth of 2,298 meters. “On Saturday/Sunday temperature and pressure surveys were undertaken in the well by a geophysicist Thorstein Egilson using specialist measuring tools. His report was studied by GoM Geothermal Adviser Mike Allen, Senior Geologist Paul Brophy, Senior Geophysicist Graham Ryan and Geothermal Drilling Project Manager George Scheid.

“The results were very encouraging and it was unanimously agreed to stop drilling and to line the production area of the well. A 7″ steel, perforated, liner pipe was installed from 1,111M down to the bottom of the well (2,298m),” explained the director. “The well is now fully secured. All the time that drilling was taking place we have been pumping cold water down the well to keep things cool and stable.

“Everything at this stage is encouraging however, we need to wait around four weeks to allow the well to stabilize and come up to full temperature after which time we will undertake flow tests. It will be on completion of these flow tests when we can estimate the capacity of the well to generate geothermal energy.”
The drilling contractor started to dismantle the rig on Sunday evening and is moving everything across to the second well referenced “Mon-02″ in preparation for drilling. It normally takes around one week to move the rig.
The Iceland Drilling Company (IDC) has been executing the drilling work since February 2013.

In a letter to the Hon. Premier Reuben Meade, signed by DFID Minister of State the Rt. Hon. Alan Duncan and Parliamentary Under-Secretary of State for the FCO Mark Simmonds, the UK Government reaffirmed its commitment to finance future capital projects for the island as long as they were clearly justified and sustainable.

“…We agree to move ahead in implementing other components of the Strategic Growth Plan (SGP) to help Montserrat reduce its financial dependence on the UK,” the letter stated.

They reiterated that all investment decisions must be based on the following: that they “(i) are financially and economically viable, both individually and taken as a whole; (ii) contribute to reducing budget dependency; (iii) account fully for the contingent and reputational risks, and (iv) clarify any institutional changes and other arrangements required to make the SGP a success.”

The UK Government said it will proceed with the implementation of other SGP components as follows;
“i. Geothermal – Depending on the results of the exploration phase, we will move ahead with a planning, design and appraisal phase for the installation of the generation capacity, involving the private sector where appropriate.
“ii. Access – We have agreed that an improved ferry service should be provided and have adjusted the budgetary aid settlement proposed for final approval to reflect the increased access subsidy required. We will consider the case for long-term improvements once the economic and financial case has been made.
“iii. Fibre optic cable – GoM should work on the planning, design and appraisal phase. If a viable economic and financial business case that fully explores private sector participation is made it will be considered for funding.

The Public Works Department recently announced that they have reached the desired depth on the first geothermal well and moving to drill the second one. In four weeks, after temperatures have stabilized they will test to estimate the capacity of the well to generate geothermal energy.

Discussions between the Access Coordinator and ferry operators are continuing to look at plans for a faster ferry for Montserrat. At the same time, efforts are being made to map out a marketing strategy to attract day trippers and other visitors from neighbouring islands.

Drilling of geothermal well referenced “Mon-01″ continued down to a depth of 2,298M. On Saturday/Sunday temperature and pressure surveys were undertaken in the well by a geophysicist (Thorstein Egilson) using specialist measuring tools. His report was studied by Mike Allen (GoM Geothermal Adviser), Paul Brophy (Senior Geologist), Graham Ryan (Senior Geophysicist) and George Scheid (Geothermal Drilling Project Manager). The results were very encouraging and it was unanimously agreed to stop drilling and to line the production area of the well. A 7″ steel, perforated, liner pipe was installed from 1,111M down to the bottom of the well (2,298m). The well is now fully secured. All the time that drilling was taking place we have been pumping cold water down the well to keep things cool and stable. Everything at this stage is encouraging however we need to wait around 4 weeks to allow the well to stabilize and come up to full temperature after which time we will undertake flow tests. It will be on completion of these flow tests when we can estimate the capacity of the well to generate geothermal energy.

The drilling contractor started to dismantle the rig on Sunday evening and is moving everything across to the second well referenced “Mon-02″ in preparation for drilling. It normally takes around one week to move the rig.

In a letter to the Hon. Premier Reuben T. Meade, DFID Minister of State the Rt. Hon. Alan Duncan and Parliamentary Under-Secretary of State for the FCO Mark Simmonds commended the island for the work on the Strategic Growth Programme which aims to move Montserrat towards more financial independence.

The ministers said the UK remained committed to Montserrat and in the letter set out the next stages for working together.

“The UK Government’s 2012 White Paper set out our vision for the Overseas Territories to be vibrant and flourishing communities, proudly retaining aspects of their British identity and generating wider opportunities for their people. We also made a separate commitment to provide assistance with the aim of helping territories achieve sustainable, inclusive growth and move towards increased financial independence from the UK. This commitment has been demonstrated for Montserrat in a number of ways including through high level visits and the approval of significant funding for the construction of a power station and the purchase of a generator, the redevelopment of the Glendon Hospital, and exploratory drilling for geothermal energy,” the letter stated.
It reiterated the conditions of the MoU which was that “significant progress across all reform areas were a fundamental precondition for any future UK commitment to invest funds in Little Bay Town, Carr’s Bay Port, access to and from Montserrat, and geothermal energy. All these investments were to be financially and economically justified.”
“When the DFID Permanent Secretary, Mark Lowcock, visited Montserrat in March, your team assessed that it was highly unlikely that you would be able to meet the requirement to secure the simultaneous binding commitment of the private sector to develop tourism facilities at Little Bay within the agreed timetable (which we extended to July 2013 for the initial “in principle”, but not binding, commitment).
“In your more recent conversations with FCO and DFID officials, however, you noted that a potential investor has come forward and a letter of intent is being drafted for a substantial investment of around US$84 million in a hotel in Little Bay and villas on Potato Hill – so perhaps the extended 31 July 2013 time limit may still be achievable if an interested yachting marina investor can be found. Separately, you also asked for time to carefully consider public private partnerships (PPPs) in the development of a port/ breakwater at Carr’s Bay which may bring with it hotel and villa developments.

The ministers have agreed to give Montserrat the time and the necessary technical expertise to negotiate the newer idea of a public private partnership agreement on co-investment in Carr’s Bay port/ breakwater.

A timeline for the PPP work is to be established between the local DFID office and the Government of Montserrat.
“We acknowledge that your government has made substantial progress in implementing the reforms set out in the Memorandum of Understanding and have made substantial efforts to attract private sector investment, both domestic and foreign,” the ministers noted.
The final review of the reform agenda began today here with the intention of evaluating the government’s efforts to improve the enabling environment for business, providing efficient delivery of public services and maximizing revenue while lowering government expenditure.

According to Staff Officer Tom Regan, there is no thematic preference this year but bids that are ambitious and sustainable are encouraged.

Some good recent projects which have received Governor’s delegated funding have included; A one-week workshop in Montserrat training civil servants in the core principles of Administrative Law, with the goal of reducing the number of times government is taken to court for non-compliance with relevant legislation; A youth radio show designed to enhance relations between various community groups in an informal and productive environment; and Co-funding for a disaster management exercise to test the island’s response to a hypothetical hurricane.

Regan said projects should be “targeted and support your organisation or ministry business plan. This could either be in the form of funding a discreet one off project, or to provide funding for something which will subsequently be budgeted for in later years.

“The project should be sustainable – training to develop a keen junior officer or making institutional reform is good; community projects that have a lasting impact are good; seeking funding for a new photocopier or asking for money for “business as usual” activities or to pay for large per diems is not encouraged.

“We are keen that we do more with our monies – a project that has many beneficiaries will likely stand a greater chance of funding than a project that only benefits one or two persons. We are also more likely to fund projects that support governmental and not-for-profit initiatives,” Regan explained.

Applications are to be sent by email to the Governor’s Office by Friday 7 June. Successful applicants will be notified by the end of June. Email Tom Regan at thomas.regan@fco.gov.uk.