A Bailey bridge accommodates traffic during repair of the Hope River Bridge that was damaged by Hurricane Gustav in this October 2008 photo. The Ministry of Transport and Works' capital budget has been cut by $1.48 billion in the revised supplementary estimates of expenditure for 2009/10. - File

The revision to the capital budget of the Ministry of Transport and Works has been marked by savage cuts across the board for Capital A projects that are wholly financed by Government and Capital B projects that are co-financed by Jamaica and external partners.

The ministry's original Capital A budget of $3 billion has been cut by $1.48 billion. But the newly tabled first supplementary estimates adds a new wrinkle in the form of a $1.8 billion grant allotment which represents the disbursement of the fuel tax proceeds to the Road Maintenance Fund (see table below for revised figures).

The grant to the Road Main-tenance Fund from the proceeds of the fuel tax for the entire fiscal year 2009-2010 is projected at $1.8 billion.

However, when the tax was introduced in the Budget Debate in April by the minister of finance, it was announced that only a fifth, or 20 per cent, of the fuel tax receipts would be given to the RMF to carry out maintenance and repairs to the country's road network that was not currently able to be done within the central Government's capital budget and the allotment that the RMF was already receiving from motor vehicle licensing fees.

Additional roadwork

In essence, the proceeds from the fuel tax given to the RMF would be used to carry out additional roadwork. It was not intended to be a substitute for the allotments in the Ministry's Capital A budget.

Then there is the issue of the amount as allocated in the First Supplementary Estimates as the grant to the RMF.

The fuel tax was introduced in May 2009 and in the first quarter (May to June 2009) the tax intake was approximately $4.8 billion. Twenty per cent of this amounts to $960 million.

Given the experience of the first three months, it is further expected that the fuel tax will amount to approximately $18 billion for financial year 2009-2010. Twenty per cent of this would be around $3.6 billion.

An explanation should emerge during the deliberations of the Standing Finance Committee and the subsequent debate on the projections for the fuel tax used in the estimates and the reason for the grant allocation of only $1.8 billion to the RMF, as well as the apparent use of the fund to substitute for the Government's Budget.

renee.shirley@yahoo.com