MINISTRY PAPER
26//;2,
ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS OF THE
NATIONAL IRRIGATION COMMISSION LIMITED
FOR THE YEAR ENDED MARCH 31, 2011
The matter for tabling in the Houses of Parliament is the Annual Report and Audited Financial Statements of the National Irrigation Commission Limited (NIC) for the year ended March 31, 2011. 2. OPERATIONS The Commission reported overall improvement in the service provided to customers during the 2010/2011 fiscal year. However, there was a reduction in the number of activities pursued by the NIC due to the worldwide economic recession. Other challenges faced included rising energy costs and relatively low agricultural activities in the areas it served. Consequently focus was given predominantly to: • Continuation of the Energy Management Programme across all divisions • Limited capital works programmes • Upgrading of the data collection process for water production, distribution and energy use (on-going) • On-Farm Water Management • Rehabilitation of pumping equipment in Hounslow, St. Elizabeth Achievements of the NIC included:
• A reduction in energy usage in Clarendon because of less pumping time resulting from the flow of the St. Toolis spring water into the Main Canal • Acquisition of 25 acres of land for a micro dam at Hill Run in St. Catherine, which guarantees adequate water supply during periods of drought. • Improved conveyance efficiency resulting from repaIrs to the Main Canal including Line A, where 1,292 feet of pipes were connected to take water from Jacobs Hut No. 1 to Rhymesbury in Clarendon. • Refurbishing of the Hounslow office in St. Elizabeth. • The establishment of an energy data collection and monitoring team at the Operations Centre to manage power consumption and billing errors by the Jamaica Public Service company.
3. NATIONAL IRRIGATION DEVELOPMENT PROGRAMME (NIDP) The National Irrigation Development Plan (NIDP) was completed in 1998 by the National Irrigation Commission Limited (NIC). The main purpose of the plan was to identify and prioritise irrigation projects for implementation with long-term objectives to improve farmers' income and increase rural employment. A total of 51 priority projects, valued at US$106M, were identified. The implementation of these projects will result in more efficient use of agricultural lands and significantly increased crop production levels in the project areas. In addition to Government of Jamaica (GOJ) funding, NIDP has also received financial support from the Caribbean Development Bank (CDB) and the Inter-American Development Bank (IDB) to fund several projects under the NIDP. 3.1 CDB Funded Flagship Projects
The GOJ and CDB have funded three 'Flagship' Projects to the tune of US$12M. The focus areas include Hounslow and Pedro Plains (Beacon/Little Park) located in St. Elizabeth and Seven Rivers, S1. James. Infrastructure work on all three projects was completed and the schemes are In
operation. During the period under review, through the Production and
Productivity Programme of the Ministry of Agriculture & Fisheries, areas under production have significantly expanded within the Hounslow and Pedro Plains Schemes. Under the Land Regularisation programme, 19 titles were issued from the 63 requested by lot holders in Pedro Plains. A total of 144 farmers within the project areas have also benefitted from on足 farm equipment disbursements of one (1) acre of drip irrigation apparatus and training in the proper usage and maintenance of the irrigation systems. Agricultural Technical Service was further extended to include training courses in weed control, pesticide use and improvements in watermelon production. 3.2 Inter-American Development Bank (lDB) Funded Projects
The IDB funded programme, signed on May 27, 2005, is designed around four (4) implementation components, namely: Institutional Strengthening of the NIC; Promotion and Formation of Water User Associations (WUAs); Farmers' Technical Assistance and Training; and the Provision of Irrigation Infrastructure on the five irrigation projects. The full project cost is US$21M, of which the IDB contributes 800/0, while the GOJ provides the remaining 20%.
The component relating to the establishment of WUAs in each NIDP Scheme has been substantially accomplished. The NIC continues to monitor the WUAs' progress in a bid to ensure sustainability. Consequent to exposure relating to deficiencies in the operations, the NIC and the Department of Co-operative & Friendly Societies (DCFS) jointly conducted training in leadership development, recordkeeping, and conflict resolution with the WUAs. During the year 2010, five training sessions were held involving over 130 farmers. The course of study exposed farmers to agricultural and marketing techniques, as well as business planning and loan financing, to bolster their economic activities. The NIDP has developed a Leader Farmers Training Programme with the aim of maintaining knowledge transfer during and after the execution of the project. The programme was launched in October 2010 and has presently achieved Human Employment and Resource Training (HEART) Certification. The 30 lead farmers from each of the 6 WUAs were trained in training needs analysis; adult training methods; and presentation skills to be facilitators in their respective WUA schemes. Irrigation infrastructure works for the period under review included the installation of replacement wells, pumps, irrigation pipes, and a security system at the Colbeck pumping station. The NIC also drilled wells and conducted pre足 investment studies, amounting to US$249,000, in Essex Valley and St. Dorothy. Under the Irrigation Area Land Regularization programme, cadastral mapping works were undertaken, resulting in over 20 map sheets comprising 1,060 parcels being submitted to the National Land Agency (NLA). 4. COMMERCIAL DIVISION Water Sales and Drainage increased by approximately six per cent (6%) or $11.8M from $199.3M to $2l1.1M. This increase can be attributed to a 50% increase in irrigation rates for agricultural users and a 100% rate increase for non足 agricultural users. Increased agricultural activities as a result of the re-engaging of un-utilized and underutilized lands also impacted on the upturn in water sales revenue. 5. FINANCE & CORPORATE PLANNING The commission earned a surplus of approximately $40M in the 2010/2011 financial year. This surplus represents earning of $153M compared to a deficit of $113M incurred in the prior year. Revenue from the core business (water sales and drainage charges) increased marginally by $llM or 5% over the prior period,
which is due in part to higher irrigation rates effected in the first quarter of the
2010/2011 fiscal year. The GO] increased subvention to the Commission by 19% or $80.6M. This increased subvention combined with a marginal decrease in operating cost resulted in a $99M increase in gross operating income, from $1 OM in 2009/10 to $109M in 2010/1 L Total assets also increased by 100M (3%) due to a $21M increase in accounts receivables. 6. SALARIES & EMOLUlVIENTS The compensation of the directors and sernor executives are set out at appendices I and II, respectively. 7. AUDITOR'S REPORT The Financial Statements were audited by KPMG Chartered Accountants and they have stated that in their opinion the financial statements gave a true and fair view of the financial position of the Commission as at March 31, 2011, and of its financial performance, changes in equity and cash flows for the year then ended, in accordance with International Financial Reporting Standards and the Jamaican Companies Act. 8.
The Annual Report and Audited Financial Statements of the National Irrigation Commission Limited are hereby submitted to be tabled in the Houses of Parliament.
/0!iClark~~;;::;:;:::::::=-Roger
Minister of Agriculture and Fisheries April 16, 2012
Appendix I
DIRECTORS COMPENSATION
Position of Director
Fees
($)
Motor Vehicle Upkeep/Traveiling or Value of AsSigned Motor Vehicle ($)
All Other Compensation including Non-Cash Benefits as applicable ($)
Honoraria ($)
Total ($)
Statutory Director 1 *
213,627.00
453,084.00
-
2,259,908.00
2,926,619.00
Statutory Director 2
125,694.00
99,640.00
-
-
225,334.00
Statutory Director 3
96,210.00
-
96,210.00
Statutory Director 4
118,452.00
157,000,00
-.
275,452.00
Statutory Director 5
108,624.00
206,950.00
-
-
315,574.00
Statutory Director 6
130,866.00
128,760.00
-
Statutory Director 7
16,035.00
-
Statutory Director 8
201,730.00
212,010.00
-
Statutory Director 9
40,863.00
17,550.00
-
Statutory Director 10
66,209.00
8,550.00
-
-
74,759.00
Statutory Director 11
79,658.00
50,196.00
-
-
129,854.00
Statutory Director 12
99,313.00
23,190.00
-
122,503.00
Statutory Director 13
170,695.00
129,870.00
-
300,565.00
Statutory Director 14
189,833.00
-
189,833.001
Statutory Director 15
103,969.00
97,740.00
-
201,709.00
Statutory Director 16
136,556.00
63,890.00
-
-
200,446.00
Statutory Director 17
196,041.00
246,660.00
-
259,626.00
-
16,035.00 413,740.00 58,413.00
442,701.00
Total 2,094,375.00 1,895,090.00 6,249,373.00 2,259,908.00 Notes * Statutory Director 1 is employed as a Consultant to the NIC's National Irrigation Development Programme (NDIP) and was compensated in the capacity as NDIP Consultant to the tune of $2,259,908.00 during the period under review
Appendix II
SENIOR EXECUTIVES COMPENSATION Position of Senior Executive
Year
Salary
Gratuity or Performance
($)
Incentive ($)
Chief Executive Officer
2010/2011
5,633,294.00
Director of Finance & Corporate Planning
2010/2011
5,184,906.00
Director of Commercial Operations
2010/2011
4,445,441.00
Director of Corporate & Legal Services
2010/2011
3,915,362.00
(Acting)
2010/2011
3,280,988.00
Deputy Chief Executive Officer
2010/2011
2,299,939.00
2,499,349.00
Traveling Allowance or
Pension or Other
Other
Value of Assigned Motor
Retirement Benefits*
Allowances**
Vehicle ($)
($)
($)
398,250.00
-
796,500.00
238,745.00
796,500.00
Non-Cash Benefits
Total
***
($)
($)
60,000.00
8,590,893.00
522,046.00
-
6,742,197.00
207,313.00
530,078.00
-
5,979,332.00
796,500.00
81,570.00
-
-
4,793,432.00
-
796,500.00
174,565.00
210,312.00
-
4,462,365.00
-
498,883.00
-
-
-
2,798,822.00
2,499,349.00 --.足
4,083,133.00
702,193.00
1,262,436.00
60,000.00
33,367,041.00
-
Director of Engineering and Technical Services
iTotal
24,759,930.(){) ,_
-
..
-.~.-.~.~.-.~
..
-.~
..
-.~
..
Notes
*
"Pension or Other Retirement Benefits" represent the NICs matching 5% pension contribution to the company's Defined Benefit Pension Fund, on behaf of the employees in question. No such payments were made on behalf of the Chief Executive Officer and the Deputy Chief Executive Officer as both are short term contract officers of the NIC.
** "Other Allowances" represent seniority allowances and qualification increments being paid as personal pensionable allowances. *** "Non-Cash Benefits" represent the taxable benefit conferred by the assignment of a partially maintained vehicle to the Chief Executive Officer.
I