Government Approves $25million Credit Line

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The Opposition members were outnumbered and outvoted on 25 April when a division of the House of Assembly was called; and the majority-Government approved a Motion that establishes an Operating Line of Credit in the sum of $25Million.

The Motion was presented by Premier Dr. the Hon. D. Orlando Smith who explained that the Line of Credit was for the purpose  of providing working capital support for the Government.

Premier Smith explained that CIBC FirstCaribbean International Bank agreed to grant the Operating Line of Credit to the Government of the Virgin Islands for the said support.

“It is agreed between the CIBC FirstCaribbean International Bank and the Government of the Virgin Islands that the Principal Repayment is to fluctuate from deposits until maturity, with an annual clean-down of any drawn balances for a period of three consecutive business days on each anniversary of the facility,” he disclosed.

The Premier noted that the Line of Credit is essential, especially for small businesses that do business with Government: “When doing business with the Government, businesses, especially small businesses, would have to wait a long time to get paid for the services they rendered.”

The Minister of Finance explained that the wait was because of the way revenue came in; and explained that the revenue is not on a smooth monthly basis, but rather comes in at various times.

He further mentioned that it is becoming challenging for small businesses, so Government decided to have a facility to better manage its cash flow in order that the persons that do business don’t continue to be affected.

“This line of credit will allow that, because when revenue for business is low, Government will be able to call in the line of credit to meet commitments and then that line of credit will be paid back into the fund, and so at the end of the year we will maintain that line of credit for that same $25M,” he added.

Hon. Fraser Says it’s a Duck

However, the Opposition announced that they were concerned about certain aspects of the arrangement with the Bank and voted against the Motion.

During the debate of the Motion, Leader of the Opposition, and Third District Representative, Hon. Julian Fraser said: “This is a dark day in the history of this Territory where we have to now come to this House of Assembly to borrow money for the day to day running of this Territory. It has never happened before…It is one simple answer, the over extension of the resources of the Territory, we are over extending ourselves.”

Hon. Fraser told the House that there was an issue of trust and declared that if it quacked like a duck it must be a duck. “When I talk about trust, I do not trust this administration with the finances of this Territory. They come here tell us one thing and they go down town and do something else totally different; and it takes them a whole year to come back here to make good on whatever changes they made down town.”

“Everybody knows what happen with the $8M that was diverted from East End/Long Look sewerage project to the Tortola Pier Park. Why should anybody trust them with the monies they are asking for and what they are going to use it for. If it walks like a duck, quacks like a duck, it is a duck. This is a loan, call it what you want, line of credit and all kind of fancy stuff, it’s a loan.”

The Opposition Leader also said that there was no need for the Line of Credit: “If there is some cash flow issue there is no need to borrow that $25M, first of all…You can get $25M, take the $15M from reserve fund because the British government don’t seem to care about the Protocols…go to BVI Ports Authority since the minister said they have money up there, get $8M, take $2M from airline (BVI Airways) ,so you don’t have to go to this bank.”

Opposition Member and First District Representative, Hon. Andrew Fahie said that the need for the Line of Credit is an indication that something went wrong.

The Legislator announced that more detail was required and that the Government should furnish more information on the Line of Credit arrangement: “I humbly request that the government respect this honourable House a little more by providing for this honurable House all the details that were given to the bank while requesting for this line of credit – this loan.”

“This is the public’s business, and they cannot continue to operate as if it is private business, as if this House has no right to all details of any government transaction in every respect especially financial…Whatever is provided to the bank, must be provided to this House,” Hon. Fahie stated.

The First District Representative said that as a means of putting things right a master plan should be drafted: “We need a master plan when we come to getting the finances of this country corrected, and I don’t mean this as any offence to anyone. We need to forget about partisan politics and get a full team in finance, even if it’s a select committee. Them and us to find out exactly where the country is. It does the country no good for the government and opposition to be speculating how the country is,”

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