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Commentary>Cost overruns versus social and economic infrastructureBy Wilberne Persaud, Financial Gleaner Columnist |
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A friend versed in the arts but not economics and treasury bills remarked to me: "I didn't realise I knew anybody who had $40 million."
Revelation came in discussing bank accommodations and credit with her friends. I responded: "Inflation makes so many J-dollar millionaires, that's about half million U.S. dollars, a Miami four bedroom house or small New York apartment; or at a stretch, two Barbican three bedroom gated-community townhouses." But, of course, that is still a whole heap of money.
When ordinary humans hear big sums of money mentioned we have difficulty grasping the reality. Numbers roll off the tongue but meaning is like Blue Mountain mist without its beauty.
Recent news headlines splash US$43 million. Yes, the cost overrun for that perhaps now infamous south coast hotel that our tax dollars and Urban Development Corporation achieved. Calculate. Multiply that number by 67. We get two billion, eight hundred and eighty-one million (J$2,881,000,000).
Ordinary people can't 'penetrate' that number, it's too big. But imagine Victoria Jubilee with one mother per bed, hospital wards reopened, or the kindergarten and infant schools that money could have built, equipped and staffed. Then the number becomes real.
Twenty superbly trained school heads at $2 million per year - only $40 million. Computers, cable internet access - perhaps another $40 million. Together less than 3.0 per cent of this money. Follow my drift? There would still be a lot more money to spend usefully.
We must abandon the theatrics of Gordon House performances, profiling, photo opportunities etc., and deal with real alternatives to these abominable instances of unauthorised use of public funds.
In protest, should you not hold back on paying your motor vehicle, investment broker, or rum-bar license fee, or income tax? No, you can't. Well, you can. But unlike those who spent so much of your money, with no authorisation, you will face consequences.
These may range from your licence being taken away, your business closed, fines that are multiples of your unpaid fees or god forbid your person dumped in a jail to which hell is a preferred alternative.
No recourse, no consequences. This is the perennial problem of government 'ownership' in Jamaica. No private business, no real estate developer, internet service provider, patty shop operator can afford to have a manager who spends money without authority, overrunning budget. It simply cannot be done. Not for long anyway.
HELL TO PAY
Banks will query the overdraft or just bounce the cheque. The owner looks
at the numbers often - perhaps in bed at night wondering if he/she will
lose both shirt and undergarment or make a profit. And once it is unearthed,
there will be hell to pay. Should the overspending manager have assets,
they will be stripped to recover. Of course, firing is automatic.
Think about it. When last, if ever have we seen a news item: 'ABC Private Developers Limited overspent $40 million'? Cost overruns are oh too common. But who pays? Of course, you did have a contract to purchase that townhouse. In the contract there was a clause governing escalation. It was built in. The private developer has no bottomless money pit or rather, funding source, to cover unauthorised overruns.
This concentrates the mind and relieves us of super exorbitant cost overruns or over-design. Financiers of private projects, owners, control and access the books.
Taxpayers can't. Taxpayers have to be content with self-serving theatrics - and a heap of contradictory accusations and innuendo.
These pages lament the sparseness of expanded listings and participation on the stock exchange. Our capital market is not growing robust quickly enough. We pray nationally at breakfast for reduction of crime. We are disturbed when our athletes fail and have come to expect world beating performances from them.
SLOPPINESS
And yes, they so often oblige. Why do we expect and demand world class
performance from our athletes but accept sloppiness from our professionals
and bureaucrats in the state apparatus? Surely we grasp how our athletes
achieve these feats. We know it is not by taking drugs, shirking training
and engaging in manifold unauthorised activities.
Why then do we believe we ought to allow individuals whom the society is encouraged to respect, whom we compensate handsomely, entrust with our heritage and treasure, to simply abandon good sense and disobey a complex array of rules with no fear whatsoever of consequences?
Apart from the fact that we divert funds from economic and social infrastructure, thereby literally robbing generations to come, it is also well known that positive outcomes of development are connected to cultures of responsibility.
Twenty-first century development cannot be achieved once these conditions persist.
email: wilbe65@yahoo.com