NATIONAL PARLIAMENT OF
PUBLIC ACCOUNTS COMMITTEE TRANSCRIPT
Inquiry into the 2007 Supplementary
Appropriation Bill 2007 - Head 277: Ministry of Infrastructure Development
(Uncorrected
Version – subject to changes upon revision)
Mr Chairman: I think we
are looking at the Supplementary Bill 2007 which $52 million is being
appropriated for further government use.
The Ministry of Works has asked $10 million out of that amount. About 20% of that amount is what the Ministry
of Works is asking. The Permanent
Secretary of Ministry of Works is here and his officials to explain why they
need $10 million. Welcome Permanent
Secretary, Moses and the Accountant. I
will give the chance for you to make your presentation.
Permanent Secretary: Thank you very
much Chairman. We have requested the $10
million under subheads 0250 item 7501 because this national transport fund is
basically used especially for maintenance under our programme for transport
maintenance for the whole of year 2007.
We requested under Cabinet approval for $12 million and we were given in
the appropriation at $4.3 million.
Basically this is for the maintenance programme as required under the
national transport plan for the next five years. There will be a progress of commitment by
government to road maintenance throughout the country that will be increasing
for the next five years, and that will demonstrate to donors like ADB and
EU. But there is a genuine commitment by
the government to progressively appropriate such funding. For this year though it was passed through
Cabinet, in the appropriation they only gave $4.83. So this is basically bringing through the
total requested of the $7 million.
The other is the repair of office
buildings. Again there is a building
maintenance programme on government buildings that we intend to do during the
year, and this $3 million will basically be for that purpose to complete all
our programmes for this year 2007 in the building maintenance. So that should be able to take us through to
December of 2007. The programme is
already set in place and it is a continuing maintenance programme for the office
buildings of the government including provinces. There are building in the provinces like the
Commerce tie houses and other tie houses that we have that is part of this
programme.
Thank you Chairman.
Mr Chairman: Thank you
PS. Here you are. That is the Ministry of Works. Two items that have appeared in the
Supplementary are national transport fund and the repair of office buildings,
$7 million for the fund and $3 million for office building repairs. Put that explanation to the Committee. Any queries?
Hon Boyers: Could the PS
explain the contingency expenditure?
Permanent Secretary: The $3
million contingency for the motor vehicles, we have already overspent the
amount of dollars in the vehicles and therefore this is basically to supplement
that overspending for the motor vehicles.
Hon Boyers: In regards to
that I believe a few months ago there was a …paper saying that government had
purchased vehicles and the government denied purchasing. Since then it has and I believe these 30 to
50 land cruisers coming in are already here and it appears to confirm that the
process of purchase of these vehicles was done by the Ministry or yourself
through the Cabinet decision or what because I hear it that it was through a
political appointee that actually signed off on the purchase of these
vehicles? Is that correct?
Permanent Secretary: That is
correct. The purchase and even the
ordering was not done by the Ministry.
We learned of this well after it was committed and that was by Ela
Motors of Solomons that there was an order placed through the Toyota Australia
and we were told we are not responsible and therefore we are not
committed. But that is basically what we
know so we are not aware of.
Hon Fono: Mr Chairman,
who gave the authorization to the political appointee to do the ordering if it
does not come from the accounting officer of Infrastructure?
Chairman: Well it is
clear from the PS that they do not know anything about this so the order must
have come from somewhere else.
Hon Boyers: So the
question I would like to put is this. Is
this contingency warrant of expenditure in relation to these vehicles?
Permanent Secretary: No.
Hon Boyers: In relation
to vehicles of previous standing?
Permanent Secretary: Yes.
Hon Boyers: That was the
second lot of vehicles purchased for Ministers after the first lot during the
Pacific Forum?
Permanent Secretary: Yes. So we are not catering for those ones.
Hon Boyers: So this is
not in relation to that issue?
Permanent Secretary: No.
Hon Fono: Is there a
policy where purchasing of such vehicles needs to be tendered out? Why hasn’t there been any tender for the
purchase of government vehicles?
Chairman: That is a
good question. I’m sure the Ministry of
Works will know this question.
Permanent Secretary: We have to
get normally three expressions of interest for every purchase. Here however, the choice of vehicle purchase
was decided to be
Hon Fono: Mr Chairman,
my question is, why haven’t I seen any public tender in the papers when the
government was acquiring those vehicles?
And if what the PS is saying, it is not true because there are also
other brands of different vehicles such as Hyundai, Mitsubishi and some are
luxury vehicles. So who has the
authority to give approval? We also
heard that the Minister of Finance too, acquired those vehicles.
Permanent Secretary: Mr Chairman,
in fact these were Cabinet decisions to acquire these vehicles and we were
therefore processing according to those decisions, especially for the
specification of type of vehicle that was required.
Hon Fono: So for those
Potex vehicle, Hyundai, was it Cabinet’s decision?
Permanent Secretary: Yes.
Hon Fono: For what
purpose? They are luxurious vehicles.
Permanent Secretary: Those were
again decisions from the Cabinet given to us to implement. So that was the first lot and then another
decision came for us to get the Toyota Hiluxes.
Hon Boyers: Mr Chairman,
I note that Infrastructure is responsible I believe, for the purchase or
acquisition of vehicles. I noticed in
the various heads here that it is also line Ministries in their budgets to sign
in extra three vehicles for this Ministry.
I mean have the Ministries segregated from Infrastructure on purchase of
vehicles or are we doubling up on an issue where there is an allocation of
vehicles here now which the Ministry is also acquiring more vehicles under
their heads. I mean how does that
explain?
Permanent Secretary: We have
before the beginning of this year informed that the policy now is that the
Ministry vehicles will be the responsibilities of Ministries themselves. But the Ministry of Infrastructure will be
responsible solely for the entitlements, which means that every entitlement
will then be our responsibility including the purchase as well as the ongoing
service programmes for vehicle services and maintenance. So in fact that is basically what we have
budgeted for just for the entitlements of the constitutional post holders,
Ministers, Permanent Secretaries and any other contracted appointees of the
government. So that basically would be
the reason why Ministries are budgeting for their own Ministry vehicles. This was information made to us purely right
from the beginning.
Hon Boyers: For instance
the Police National Security…….these three doubled cab hiluxes purchased this
year was budgeted for to replace this …..expenditure. Is there ……expenditure here in the
Infrastructure or is it a separate issue?
Chairman: I think what
the Permanent Secretary is saying is that all the Ministries are responsible
for acquiring their own vehicles. That
is under their authorities. The
Ministries responsible for acquiring vehicles that are been given out as part
of (prenumerational) entitlements.
I was going to ask you, do you have any idea how many vehicles you are
supposed to purchase for that purpose knowing the number of Permanent
Secretaries, number of people in the service that require vehicle as part of
their package? Would you have some idea?
Permanent Secretary: It would be
between 40 to 50.
Chairman: I am asking
because there are a lot of government vehicles and the road is just about
covered with G Vehicles including all the garages.
Permanent Secretary: The Permanent
Secretaries most of them could not be given the vehicles of their desire and
they are still garaging the Ministry vehicles because at the moment we just
cannot purchase anymore.
Hon Boyers: Which
entitlements? Does that include
Ministers?
Permanent Secretary: Yes
Hon Boyers: So where does
the Ministers wives and every one else because some Ministers have 3 (three)
G-Vehicles so in the process of regulating that is there a regulatory decision
regarding that which is ongoing at the moment?
Permanent Secretary: Yes, we have
informed the Prime Minister and my Minister.
We have informed him of the Ministers that have more than one and my
Minister has written to them to return.
Now to date we have not and maybe only one has been retrieved. But for others we could not go beyond issuing
them the Minister’s directives but we were hoping at their level, Cabinet
level, as leaders they would be informed and graciously return whatever vehicle
that they are not entitle to.
Hon Boyers: The reason I
said that PS, is because I had five people turned up at my yard and take back
my vehicle which is actually approved by the Prime Minister’s Office. So I think that is the one garage vehicle you
are taking about and it was not done in a very polite manner so I would like it
to be standard across the level playing field for Ministers because we really
need to be treated at the same level as leaders. So I think the regulatory decision is taken
note of and this has to be enforced. I’m
sure the five guys that took the car from me to go and do to the rest of them
as well. Can you take a note of that Mr
Chairman?
Chairman: I was going
to ask the PS. Do the Permanent
Secretaries or the Ministers have preference on which vehicle they want because
that would explain why these vehicles have not been tendered out.
Permanent Secretary: Yes, I think
what we have is these were preferences.
Hon Fono: Chairman, I
understand that even if Ministers have preferences the policy of the government
is all acquisition of us here that it needs to be tendered out so that it is
transparent, it is good governance and having deals is open up for abuse which
is not in line with good governance practice that we are advocating as
leaders. It is public knowledge too that
some are changing vehicles every week.
In one week they drive a different vehicle and in another week they
drive another different vehicle at the expense of public funds. Policies are there but we are not enforcing
them. Entitlements are very clear under
the PER. Ministers including myself are
only entitled for one G-Vehicle. There
is no enforcement. So that is one thing
that this Committee is very mindful of, given the huge expenditure that
government funds are spent on vehicles.
It is not part of the bottom-up approach. It is not spent on rural areas. So we have to be very conscious of that.
Now if I may draw our attention to
the national transport fund allocation here, $7 million. My understanding is such a special fund needs
the approval of Parliament. Is there a
legislation drawn up for Parliament to approve this before we allocate funds to
it?
Permanent Secretary: Thank you
Honourable Leader of Opposition. As yet
the fund has not yet been discovered but because we have it under our recurrent
expenditure allocation we will continue to spend it under our recurrent. But as and when the fund is discovered we
have a legislation already in draft and my Minister has already signed to go to
Cabinet and because it is a fund it has to through the Minister of Finance whom
we were expecting would have tabled it before Cabinet and then brought to this
current Parliament but it still has not yet I think, which we are aware of, but
that is the intention. So with this
current supplementation we will continue to spend this amount of money under
our recurrent programme. It is up to the
approval of the legislature. We were
hoping it will be tabled in the final meeting of Parliament this year then next
year we will set up and the allocation that we give here will then be paid into
that. Thank you Chairman.
Chairman: Just one
question. I have a feeling that this
national transport fund is about roads and trucks what about ships?
Permanent Secretary: The shipping
is under the Marine. We have the
subsidized supplementation of the uneconomical ….continuing under the Marine
Recurrent Expenditure.
Hon Fono: So some
shipping companies have already applied and assisted?
Permanent Secretary: Yes, we will
continue that programme on the uneconomical routes. We hope the ADB from this year will approve by
them that they will be putting in a TA to look more seriously into franchising
the uneconomical routes as from next year so they will be assisting us in that.
Chairman: I understand
that that subsidy programme for shipping is just about to run out now. We have six more months to go. Is there some more money coming out of this?
Permanent Secretary: We may have
to get it branch out before the normal process of virements and if we could not
afford that anymore then maybe request further contingency at the end of the
year.
Chairman: Any more
questions while the PS is here?
Hon Fono: Chairman,
coming back to these 50 Land Cruisers which the PS has no knowledge of, and if
there is already a commitment by the government through that political appointee,
is the PS aware that the Company can sue the Government for damages on that in
failing to honor the commitment that that political appointee has done on
behalf of the government?
Permanent Secretary: Not that I
know. And the other thing is since the
Ela Motor here which we deal with did not make that commitment with
Hon Fono: Are they
already here?
Permanent Secretary: About 30 have
already arrived, and I told him to continue selling it on their own programme.
Hon Fono: It appears that
they maybe allocated to the fifty constituency development officers?
Permanent Secretary: If they have
roads in some of them I don’t know.
Hon Fono: Not all
constituencies have roads but that is part of the bottom up approach.
Hon Boyers: Can the PS
follow up with this Committee in regards to that seeing that he is not unaware.
Maybe if he can find out from the
overseas supplier maybe through the local agent of this issue. Now that they are in the country they can’t
come in under ….they don’t do that in that large amounts. Can the PS acquire the document that
facilitated the transportation of these vehicles into Solomon Islands for the
purpose of government use because we need to make sure that we are aware that government
expenditure and this expenditure in the supplementary is not going to be vired
out in the purchasing of these vehicles subject to that.
Permanent Secretary: Yes, we will do that.
Chairman: We are going
to deal with this political appointee as known to the Chairman, and maybe I
will summon him to come and explain why he ordered the fifty vehicles without
authority.
Hon Fono: Not only
that, since he works in the Prime Minister’s Office, the Secretary to the Prime
Minister and Cabinet being the accounting officer may have knowledge of
that. He may have given him
directives. If not the Prime Minister or
the Minister of Finance and that is not procedural. That is not good government practice.
Chairman: Okay we have
the privilege of questioning them this afternoon so we will wait for them until
they come here.
Hon Koli: Thank you
Chairman. Earlier on you were talking
about virement on shipping in the cost of shipping and inter island shipping
and maybe the current ……….that have already been expended. Some of the ship owners are still looking
forward to that assistance in terms of having them. And this $7 million here, I am just
interested in ……………can be possible in terms of virement to continue to fund
these ship owners.
Permanent Secretary: Under the
Marine subsidies basically we were subsidizing the economical routes. But there is a project that we used to hold
with ROC that goes for shipping.
Unfortunately under this year’s budget it appeared zero so there are no
more. I think ROC has not given in any
injections for that.
Hon Fono: It used to
$10 million.
Permanent Secretary: Yes, that is
right. We were given assistance through
the Ministry and we were just administering that but this year there are no
more allocations except a few that has been approved and some are already
complete and withdrawn that. Only the
Hon Fono: The
delegation is ready to go to
Permanent Secretary: That is
right. In fact they may have already
gone so that is the last project that I know that we still keep otherwise for
assisting small ship owners they are no more under the ROC funding.
Hon Fono: But that is
one of the political baits that the government is using. They promise some Ministers additional ships
for their constituencies but I failed to see that in the budget.
Permanent Secretary: That is
right. Maybe next year they will come
on. So if it comes on next year we will
basically administer some more ships but good ones this time. Not those ones to dump our waters. That is the standard we are now trying to,
and with this new TA coming we will begin to put in more standard ships
………..from outside they say to be a certain year old. It will keep on floating after getting them
otherwise they will go in for about three or four years. So that is that.
Hon Fono: Chairman,
under this national transport fund if there are existing roads in the provinces
that need to be repaired what is the Permanent Secretary’s advice on that if
submissions are coming through their respective members of Parliament or coming
through the Provincial Works Section for tapping that fund to do repairs?
Permanent Secretary: Basically what
we will do is to send engineers to make assessments. Basically everybody requests maintenance
programme. We will have to just fit in
the amount of money that we have. We
have another in our development budget an allocation of a million dollars to do
assessments so it won’t be part of this cost.
The assessments are done separately under the development so the
engineers will go out and do those assessments before funding these
programmes. It also includes the ones
that have just been done and the ongoing maintenance like the contracting sites
of brushing would already entered into contracts on these Guadalcanal Roads and
Malaita between Gwaunaru and Auki and hope to do others in Malaita and other
provinces as well as and when they complete these assessments.
Chairman: Any more
concerns? Okay, well done Peter. Thank you for coming. You are free to go.
Permanent Secretary: Thank you
Chairman.
Chairman: Thank
you. I think that is all for this
morning ladies and gentlemen.