Government not compel to pay compensation
Member of Parliament (MP) for South Malaita Rick Hou has condemned recent Cabinet’s endorsement for $3.7 million to compensate Sun Express for the damages and boat hiring to Mbike Island, on the days before the election victory by the DCC government.
In an exclusive interview with the former Finance Minister yesterday Mr Hou said, government is not obliged to pay for the costs incurred by the company for the Mbike trip.
He said, the trip is just like any other holiday trips by any person wishing to spend leisure time out of Honiara.
Settling the payment would set a bad precedence for any future incident, he added.
“It is a private trip operated by a private firm so they (MPs) know very well the costs and rates of the charter, as well as the rules of the operator if any damage happens to the boat.
“It is inappropriate for the government to pay the bill because if they pay for it then that sets a bad precedence for any future incidence, which any group can demand government to pay for their trip or service,” he further stated.
Mr Hou pointed out, such request to settle the bill for a private trip should not be brought before Cabinet to decide on and then threw the burdens on tax payers to foot the bill.
He added even the costs of boat damage if properly evaluated would less than $3.7 million demanded by Sun Express.
“We are concern about what government is paying for because this kind of expenditure incurred on tax payers is irrelevant, illegitimate, improper and not straight,” Mr Hou stated.
“This is a predetermined decision already these group and they just used Cabinet as a rubber stamp to approve illegal payments from tax payers’ money,” he added.
Documents obtained by the paper last week showed Finance Minister Snyder Rini in April took a paper to Cabinet seeking its approval for the government to foot the $3.7 million his group was billed by owners of Sun Express.
Cabinet approved the request and directed the Ministry of Finance to pay the amount, which has been touted in the “confidential” cabinet papers as “Government Support to MV. Sun Express”.
But when the directive for payment reached the office of the Accountant General last month, Accountant General Paula Uluinaceva wrote to Mr Rini saying:
“Currently, there is no appropriation authority for the payment of the agreed amount out of Consolidated Funds.”
Mr Uluinaceva stated Treasury’s advice on this cabinet position had not been sought prior to Cabinet deliberations and its decision.
He pointed out that this cabinet decision is a policy directive to reimburse a shipping service operator for damages incurred during the normal course of meeting their contractual obligations to government.
““These damages were inflicted with political and criminal intentions which are essentially an integral part of business risk that the provider has chosen to take in carrying out this line of business,” Mr Uluinaceva said in his letter to Mr Rini.
“In short, this payment sets a bad precedence that allows substantial claims on public funds from suppliers and service providers to Government for damages claimed to be incurred during the course of their transactions with the Government.”
Because the requested $3.7 million was not in the 2015budget, Mr Uluinaceva had suggested to Mr Rini the following options
· Approve a virement for the re-allocation of funds already appropriated in the budget to meet this commitment.
Mr Uluinaceva said in this case, the allocation from which the virement is to be made from should serve the same purpose as the purpose behind this policy decision.
“The rationale behind this decision appears to be the need to support the maintenance and operations of a tourism/shipping operator,” Mr Uluinaceva said.
He said the following allocations, or combination thereof, can be vired for this purpose:
– Development Budget – Ministry of Infrastructure Development (MID) NTF Program – Franchise Shipping ($13 million)
– Development Budget – Ministry of Infrastructure Development (MID) Shipping Grants – Capex ($30 million)
– Development Budget – Ministry of Culture and Tourism, Tourism Development Projects – Subventions and grants ($15 million)
By AATAI JOHN
