By McPherse Thompson, Staff ReporterFINANCE AND Planning Minister Dr. Omar Davies is expected to expound on the future direction of the National Investment Bank of Jamaica (NIBJ) during a press conference he will be hosting at his Heroes Circle office in Kingston this afternoon.
Sources said that with the transfer of the Investment Bank from the Office of the Prime Minister to the Ministry of Finance, there could be a major shake up as Dr. Davies has for some time been advocating its restructuring.
In announcing the new Cabinet last week, Prime Minister P. J. Patterson said the Ministry of Finance was integral to the investment process and therefore responsibility for privatisation, and hence the NIBJ, would be transferred there. The Prime Minister held responsibility for the NIBJ before Parliament was dissolved to make way for the October 16 general election.
Asked earlier this week whether there were plans to either restructure the NIBJ or merge it with another state-owned entity, a Ministry spokesman declined comment on the matter, but said Dr. Davies was expected to address those and other issues during the press conference.
A shut down, merger or transfer of the remaining functions of the NIBJ to the Development Bank of Jamaica (DBJ) or another government department has apparently been in the making for some time now. Although Dr. Davies had little clout over the affairs of the Bank because its operations were clearly vested in the Office of the Prime Minister, he was said to have met with major functionaries in September - the month before general election - and warned them to shape up.
The NIBJ has come in for close scrutiny especially since its then president Dr. Gavin Chen and a senior director were forced to resign following public outcry over the levels of remuneration to public sector executives.
The NIBJ was again at the centre of a controversy last year when it provided a loan of $177 million to NetServ, a company in the information technology sector that was expected to provide thousands of jobs, but which collapsed six months after the Bank paid over the money to the foreign investors.
In its 1999-2000 annual report, the last to be tabled in Parliament, NIBJ chairman David Coore commended the directors and staff for their "tolerance and dignity in the face of relentless - and sometimes hostile - inquiries from all quarters into the operations of the Bank." However, he said the NIBJ had nothing to hide and was willing to make all aspects of its operations transparent and available to the relevant agencies.
Mr. Coore said in that report that investment in the productive sector and divestment of government-owned entities during the year under review had been far from satisfactory. Although he did not, in that report, again specifically mention state-owned entities such as the Jamaica Railway Corporation which the Bank has for many years before being seeking to divest, Mr. Coore said privatisations were sluggish, although there were signs of a rebound.
In the 1999-2000 report, the Bank also reported that it invested just under $64.5 million in eight projects, a significant decrease from the prior year's $493 million in 20 projects.
It was in that report also, for the first time, that compensation packages for the Bank's senior executives were revealed, in line with Government directives The two year-old report shows that the NIBJ president was then being paid a basic annual salary of $6.36 million, with an additional $336,000 in allowances. The two vice president were being paid between $3.4 million and $4.2 million in basic salaries, plus allowances of between $130,000 and $245,000. Senior executives on contract were also entitled to gratuity of 25 per cent of basic salary in lieu of pension, and were each provided with a fully-maintained vehicle. They were also entitled to "normal benefits" available to all employees.
