TREASURY AND RESOURCES MINISTER
Approval of capital expenditure
from Trading Funds
1. Purpose of Report
To enable the Minister to approve the use of trading funds in accordance with the Public Finances (Transitional Provisions) (No. 2) (Jersey) Regulations 2005.
2. Background
The Public Finances (Transitional Provisions) (No. 2) (Jersey) Regulations 2005 include the following at Article 22:
“Money standing to the credit of the trading fund of a States trading operation may also be used, with the approval of the Minister, for a capital project of the trading operation if –
(a) the amount approved by the States for the project as part of an annual business plan has proved to be insufficient; or
(b) the project arises from a contingency that could not have been reasonably foreseen at the time the estimates of the States trading operation were submitted to the Minister in accordance with Article 8 of the 2005 Law for inclusion as part of an annual business plan.”
There are two current situations where the Minister’s approval is requested under (a), one relating to Jersey Harbours, one to Jersey Airport.
Jersey Harbours
Jersey Harbours are purchasing a 25 tonne boat hoist. The hoist was first budgeted in 2006 at a cost of £104,000. By the time the process had been gone through to approve the purchase the 60 day quotation period had lapsed. During this period steel had gone up in price 15%. As the hoist quote had only just expired it was agreed by the suppliers to increase the cost by a minimum amount to £106,650. This is a strategic piece of equipment that the Marine industry relies on heavily. The existing 16t hoist is no longer capable of working the quantities of lifts and needed replacing urgently. Additional approval is therefore required for £2,650.
Jersey Airport
The Airport is seeking to transfer £52,000 between two projects previously approved by the States: from the Aeronautical Transmitters and Receivers budget to the Airport Minor Capital Assets Budget. A ministerial decision to this effect has already been signed by the Assistant Minister for Economic Development. A report prepared by the Airport is attached.
3. Recommendation
That the Minister agrees to:
· approve additional expenditure of £2,650 from the Jersey Harbours trading fund in respect of the 25 tonne boat hoist
· approve the transfer of £52,000 from the Aeronautical Transmitters and Receivers budget to the Airport Minor Capital Assets Budget
4. Reason for Decision
The Public Finances (Transitional Provisions) (No. 2) (Jersey) Regulations 2005 require the Minister to approve capital expenditure from Trading Funds where previous amounts approved by the States have been insufficient.