Delivered by: Premier-Hon. Joseph E. Farrell
Residents and friends of Montserrat, greetings.
Since the beginning of the Corona virus pandemic, the government’s primary focus was to manage the crisis keeping you the people safe. COVID-19 is still very much active in other countries and thankfully at this time we do not have any active cases; this does not mean that we should not be vigilant and responsible.
Your government is confident that if all of us continue to adhere to the measures which are in place— wearing face covering, social distancing and practicing good hygiene when our borders are finally opened and any imported cases are detected, the Ministry of Health will be in a better position to effectively manage them.
Now that COVID-19 is at a manageable level we have shifted some of the attention to rebuilding the economy.
In presenting the 2020/21 budget, I stated that due to COVID -19 our revenue streams for the year would be significantly impacted and the budget presented stood at a deficit of $22Million dollars.
This shortfall in revenue for the year 2020/21 and beyond is not unique to Montserrat, it is a worldwide phenomenon and most countries in the region and throughout the world to include our funding partner the United Kingdom, are also experiencing a shortfall in revenues.
CARICOM leaders, with few exceptions, are experiencing a significant decline in revenues and many are faced with the unfortunate reality of borrowing from international funding agencies, such as the International Monetary Fund (IMF), The World Bank and the Caribbean Development Bank (CDB) in order to meet their everyday operating expenses such as salaries, wages and to provide basic services to their peoples.
Actions such as these have consequences for the peoples of the Caribbean; as a country’s debt increase, so will their long term obligations of debt repayments.
Montserrat does not have that luxury of borrowing from these international financial institutions, we are solely dependent on collection of local revenues coupled with assistance from our funding partners such as the United Kingdom, The European Union and the Caribbean Development Bank, to see us through these turbulent times.
In this year’s budget address to the people of Montserrat, we made a promise that this government will not introduce measures which would affect the services offered. This includes, but is not limited to, meeting our social welfare payments, ensuring our public servants are paid on time and providing hospital care to our people. These are some areas that continue to be the focus of this government’s agenda.
Since the budget was presented in June, as the Minister of Finance, I have been working with technicians within the Ministry to chart the best way forward to manage this budget shortfall.
The injection of some $8.3 M dollars into the local economy provided by the Department for International Development (DFID) helped to buffer the harsh economic fallout experienced by residence in the first quarter of the financial year (April – June). To date this allocation has been overspent by approximately seven hundred and fifty thousand dollars ($750,000) due to the demand.
The Ministry of Finance team is working with accounting officers in each ministry to identify areas where expenditure could be reduced without greatly affecting service delivery.
Government has also discussed a reduction in the Small Capital Asset Fund, reducing expenditure on Technical Cooperation Officers /consultants (TCs) budget. These are only some of the measures we have discussed to date.
At the height of the COVID-19 crisis, the Government of Montserrat has kept its obligation to the ferry contract owners, although the ferry was anchored at port Little Bay, unable to make its schedule trips due to the closure of borders in the region and beyond.
Even though there was no passenger movement, in an effort to justify the ferry’s expenditure at this time, The Access Division introduced a ‘twice weekly cargo service out of Antigua, to assist small businesses at a cost of four hundred and seven thousand, five hundred and thirty five Eastern Caribbean dollars (EC$407,535.00) per month from April 2020, to the end of the contract period; September 30th 2020.
The proposed cost of a new contract is Five million, eight hundred and sixty eight thousand, five hundred and four Eastern Caribbean dollars (EC$5,868,504.00) or Four hundred and eighty nine thousand and forty two dollars per month (EC$489,042.00.)
In addition the government of Montserrat provides fuel costing approximately sixty two thousand, five hundred dollars per month (EC $62,500).
In other words it would cost five hundred and fifty one thousand, five hundred and forty two Eastern Caribbean Dollars( EC$551,542) per month to keep the ferry anchored at Port Little Bay.
This may have been considered acceptable in normal times but these are not normal times, and in light of the projection of low passenger travel in the foreseeable future, and with the government facing a budget deficit of $22Million, we cannot honestly justify spending a revised contract sum of EC$ 5.8 million dollars on a new contract and approximately seven hundred & fifty thousand (EC $750,000) on fuel. Combined that is grand total of roughly $6.5 million on a service which will provide little or no income at this time.
As a government, we recognize and appreciate the importance of both sea and air access in moving passenger and cargo.
But since the onset of the worldwide Coronavirus Pandemic, international travel has declined and passenger movement in and out of the region including Montserrat is at an all-time low.
Over the past months, the Government has made every effort to rationalize the way forward as it relates to access, and would like to see passenger numbers return to pre COVID19 levels. But, with the forecast of low passenger movement within the next 12-18 months and the Coronavirus pandemic still active worldwide, it is difficult to justify expenditure such as this.
Cabinet having discussed the renewal of the ferry contract, with much reluctance, made the decision at its meeting on Thursday August 27 not to renew the ferry contract in these uncertain times of travel.
If these were normal times and there was passenger movement in and out of Montserrat, a decision such as the disruption to the ferry operations would never have been considered; knowing that a ferry service has become a way of life for us over many years. In the final analysis, this is one way in which we can save without creating undue hardship on you the people.
Residents and friends of Montserrat, in government some decisions are hard to make and this is one such decision. It was not made lightly but taking into consideration all of the factors mentioned above, it was one thought best at this time.
This is no indication that the ferry is permanently cancelled, of course when travel conditions improve, it will be restored.
We are mindful however, of the difficulty which the travelling public and business owners may encounter in the short term as a result of the withdrawal of this service. I wish to assure you that government is making arrangements to provide some level of assistance to alleviate some of the hardship which this may cause, and these measures will be announced shortly.
As the country continues to navigate its way through this uncertain time, as your government we ask you the people of Montserrat to trust that our intentions are to build a stronger and better Montserrat now and for the future generation.