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Page 109

Ministry of Finance and the Public Service Fiscal Policy Paper 2021 Part 1 | Page 109

actively monitors the trajectory of the GGLs-to-GDP ratio to determine its capacity to guarantee public bodies’ debt without missing the targets established in the PDMA. In the case where loans to public bodies’ are not guaranteed, the Government might incur an implicit liability in the event that the entities are unable to meet debt service costs, or these costs inhibit their performance. The COVID–19 pandemic has negatively affected the operations of a number of public bodies, contributing to cash flow insufficiency. The primary entities affected were the Jamaica+Urban+Transit+%0ACompany">Jamaica Urban Transit Company, Port Authority of Jamaica (PAJ), National Water Commission (NWC), Urban Development Corporation (UDC) and Ports Security Corps (PSC). While there was a significant fall-off in the revenues of the Airports Authority of Jamaica, the entity’s accumulated reserves were adequate to finance its operations. Notably, if the pandemic should be protracted, these entities could experience greater fall-out in their operations, requiring further Central Government support. Many public bodies have been able to manage their operations within existing resources, while others have sought and received financial support from the Central Government. Those that sought and received Central Government support include the NWC, UDC and PSC. The Government is often required to provide significant financial support to some public bodies to supplement their cash flows. The operations of these entities are geared towards achieving certain social or economic objectives, and as such, offer products and services at below market prices. Proposed transfers to select public bodies for FY 2021/22 and estimates for FY 2020/21 are outlined in Table VII (c). Table VII (c) Public Bodies Support from GOJ*

Public Body FY 2021/22 Prop. $mn

FY 2020/21 Est. $mn

Jamaica Urban Transit Company 5000.0 5,346.3

Montego Bay Metro 200.0 72.34

Ports Security Corps 42.0 78.0

Public Accountancy Board 10.0 7.0

*Excludes loan funding and fees Source: MOFPS Jamaica Urban Transit Company (JUTC) The JUTC provides subsidised fares to students and the elderly, and regular adult rates have remained below the economic level. As such, the Government has committed to replacing the Company’s rolling stock and infrastructure as needed. While the JUTC has often been in a tenuous financial position, the challenges have been amplified by the COVID-19 pandemic. In April 2020, the Company began offering free rides to first responders including doctors, nurses, interns, porters, hospital staff, firemen, ambulance drivers, police officers and soldiers. Additionally, the closure of schools in March 2020, the

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June 12, 2021


Page 284

Public Bodies Ministry of Transport and Mining Other Montego Bay Metro Limited _____________________________________________________________________________________________

Public Bodies, FY 2020/21 Page 283 Ministry of Finance and the Public Service

Montego Bay Metro Introduction The Montego Bay Metro Limited (MBM) was established in September 1997 to provide a dedicated school bus service, for the teacher and student population in the parish of St. James and its environs. The shares of the Company were acquired by Government of Jamaica (GOJ) in 2002 to facilitate an improved bus service to the citizens of St. James, Trelawny and Hanover. Operational and Financial Overview The MBM will continue to operate in the western parishes of the island, transporting students and senior citizens. The Company projects an increased fleet of 16 units (2019/20: 14). The increased fleet is expected to improve the service reliability and by extension improve its revenue stream. Additionally to maintain the fleet schedule MBM plans to pursue a comprehensive repair and maintenance programme aimed at reducing the number of interrupted cycle trips. The MBM forecasts a net deficit of $106.28 million (2019/20: $38.81 million deficit). Government subvention represents $54.84 million (2019/20 - $118.23 million) of total revenue.

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June 12, 2021


Page 285

Public Bodies Ministry of Transport and Mining Other Montego Bay Metro Limited _____________________________________________________________________________________________

Public Bodies, FY 2020/21 Page 284 Ministry of Finance and the Public Service

Income Statement $m

Unaudited Estimated Projected 2018/19 2019/20 2020/21

Rental Income 5.86 7.13 7.28 Route Collections 44.03 55.03 99.40 Other 16.34 8.10 11.91 Total Income 66.23 70.26 118.59

Expenses: Compensation 74.98 78.45 85.15 Utilities 3.65 4.29 4.41 Interest and Penalties 4.10 - 4.10 Repairs & Maintenance 9.96 39.62 48.49 Fuel & Lubricants 47.57 68.71 95.84 Tyres 2.59 7.99 11.65 Licence & Fitness 0.57 0.09 0.58 Security Services 3.72 3.94 3.98 Insurance 5.89 5.88 6.11 Other 15.61 18.33 19.40 Total Expenses 168.64 227.30 279.71

Net Operating Loss (102.41) (157.04) (161.12) Subvention 83.79 118.23 54.84 Net (Loss)/Profit (18.62) (38.81) (106.28)

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June 12, 2021


Page 286

Public Bodies Ministry of Transport and Mining Other Montego Bay Metro Limited _____________________________________________________________________________________________

Public Bodies, FY 2020/21 Page 285 Ministry of Finance and the Public Service

$m

Unaudited Original Estimated Projected 2018/19 2019/20 2019/20 2020/21

Statement A Flow of Funds 1 Current Revenue 66.23 126.80 70.26 118.59 2 Current Expenses (168.64) (370.93) (227.30) (279.71) 3 Current Balance (102.41) (244.13) (157.04) (161.12) 4 Adjustments 18.35 293.10 66.90 146.32

Change in Accounts - - - - Receivable/Payable 17.31 292.45 41.05 145.67 Items not requiring outlay of cash: - - - Depreciation 0.65 0.65 0.65 0.65 Other Non-Cash Items 0.39 - 25.20 - Prior Year Adjustment - - - -

5 Operating Balance (84.06) 48.97 (90.14) (14.80) 6 Capital Account (1.29) (100.01) (18.60) (52.63)

Revenue - - - - Expenditure (1.07) (59.60) (0.15) (54.84) Investment - - - - Change in Inventory (0.22) (40.41) (18.45) 2.21

7 Transfers from Government 83.79 52.73 118.23 54.84 Loans - - - - Equity - - - - On-Lending - - - - Other 83.79 52.73 118.23 54.84

8 Transfers to Government - - - - Dividend - - - - Loan Repayments - - - - Corporate Taxes - - - - Other - - - -

9 OVERALL BALANCE (5+6+7+8) (1.56) 1.69 9.49 (12.59) 10 FINANCING (10a+11+15) 1.56 (1.69) (9.49) 12.59

10a Total - - - - Capital Revenue - - - - Loans - - - - Equity - - - - On-Lending - - - - Loan Repayments - - - -

11 Total Foreign (12+13+14) - - - - 12 Government Guaranteed Loans - - - -

Disbursement - - - - Amortization - - - -

13 Direct Loans - - - - Long Term: - - - -

Disbursement - - - - Amortisation - - - -

Short Term: - - - - Change in Trade Credits - - - -

14 Change in Deposits Abroad - - - - 15 Total Domestic (16+17+18) 1.56 (1.69) (9.49) 12.59 16 Banking System 1.56 (1.69) (9.49) 12.59

Loans (Change) - - - - Current AccountsOverdraft (Change) - - - - Deposits (Change) 1.56 (1.69) (9.49) 12.59

17 Non-Banks (Change) - - - - 18 Other (Change) - - - -

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June 12, 2021


Page 287

Public Bodies Ministry of Transport and Mining Other Montego Bay Metro Limited _____________________________________________________________________________________________

Public Bodies, FY 2020/21 Page 286 Ministry of Finance and the Public Service

$m Unaudited Original Estimated Projected

CURRENT REVENUE 2018/19 2019/20 2019/20 2020/21 Route Collection 44.03 111.51 55.03 99.40 Rental Income 5.86 4.89 7.13 7.28 Other Income 16.34 10.40 8.10 11.91 TOTAL 66.23 126.80 70.26 118.59

CURRENT EXPENSES Compensation 74.98 93.79 78.45 85.15 A. Directors, Executive & Senior Managers 17.16 19.10 17.74 16.82

- Salaries 17.16 19.10 17.74 16.82 - Pension Fund Contributions - - - - - Housing Allowance - - - - - Utility Allowance - - - - - All Others - - - -

B. Supervisory, Clerical & Production 57.82 74.69 60.71 68.33 - Wages 51.86 62.92 52.29 57.35 - Pension Fund Contributions - - - - - Housing Allowance - - - - - Utility Allowance - - - - - All Others 5.96 11.77 8.42 10.98

Utilities(Electricity, Water & Telephones) 3.65 4.62 4.29 4.41 Repairs & Maintenance 9.96 42.49 39.62 48.49 Fuel & Lubricants 47.57 175.80 68.71 95.84 Interest and Penalties 4.10 4.10 - 4.10 Tyres 2.59 17.28 7.99 11.65 Licence & Fitness 0.57 0.85 0.09 0.58 Security Services 3.72 2.62 3.94 3.98 Insurance 5.89 5.90 5.88 6.11 Other 14.96 22.83 17.68 18.75 Depreciation 0.65 0.65 0.65 0.65 TOTAL 168.64 370.93 227.30 279.71

CAPITAL EXPENDITURE Parts & Maintenance 1.07 37.60 0.15 54.84 Buses - - - - Leasehold Improvements - 22.00 - - TOTAL 1.07 59.60 0.15 54.84

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June 12, 2021


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