Your Governor takes pleasure in handing down the Commission’s budget for the year 2007. I am honored to present my first full budget as Governor of NCD and Chairman of NCDC. I now present the Commission’s budget in accordance with Section 6(3) of the National Capital District Commission Act 2001 as amended.

preamble & priority

NCDC over a period of time gave more emphasis to the Engineering Department at the cost of Community and Social Services. This resulted in neglecting the silent majority whom are struggling for their survival and when that fails, resorting to criminal activities thereby escalating law and order problems in the city. Based on this perception, I would like the Commission to set our 2007 priorities straight.

NCDC’s priority for 2007 is proposed at providing community related services, Law and Order, Health, Provision of effective garbage collection system, City cleaning, Parks & garden maintenance, Education infrastructures, Reconstruction and maintenance of roads, Streetlights - under core areas and staff motivation, capacity building, financial reporting, and IT capabilities under our support services.

I now present the Commission’s Revenue Estimates for 2007.

REVENUE BUDGET

·                    I am glad to announce that 2006 budget surplus of K18 million will be available for 2007 budget activities.

·                    Total Budget outlay for 2007 is K125.18 million (2006 – a restated K108.90 million). This is a net increase of 2% from the last year’s projection - excluding surplus funds.

·                    I also made it known that there will be no increase in Land tax & Garbage rates tariff in 2007. NCDC continues with the free wheelie rubbish bins program in 2007 for fully paid rate payers.

·                    Car parking fees will be imposed in 2007 for parking in road reserves and road sides. Businesses will be encouraged to lease parking spaces.

·                    Government grant to NCDC for 2007 would be K3.9 million (2006 – K3.7 million) including K1 million for development grants to the 4 MP’s.

·                     Although, it is not part of the budget, efforts will be made to introduce NCD lotteries to be run by ourselves; this is currently going in to private hands. A submission will be presented later.

·                     While I say that the priority is given to Community and Social Services, I am not neglecting engineering projects. NCDC will continue the negotiations with prospective financial institutions and if successful, the Commission will exclusively use the draw down for the purpose of the specific projects against which funding is sought.

Expenditure budget

The Commission’s 2007 budget is a balanced budget. Total projected expenses are the same as the total revenue of K125.18 million. Summary of our expenses budget for 2007 is as follows:

·                     A total of K25.83 million of our total budget is allocated towards staff entitlements including salaries, leave fares, accommodation rental and Home Ownership Scheme.

·                     K48.04 million is allocated towards capital projects, such as road reconstruction and reseal and design related expenses.

·                     K22.05 million is allocated for the Commission’s recurring operational items such as garbage cleaning, parks, road & light maintenance and transport.

·                     A total of K11.14 million is allocated towards grants to institutions such as Central Province, Motu Koitabu Council including HMF, NGO’s, Health Services and Botanical Gardens.

·                     K8.76 million is allocated for admin related expenses such as utilities, rentals, office expenses, OD interest and support services.

·                     Another K5.4 million is allocated to pay the prior year creditors such as group tax, business payments tax and for POSF contributions.

Notable cost centre allocations are as follows:

Top Management

11.6% of total budget or K14.52 million goes to the top management and centrally controlled activities. Major recipients of this slice would be:

§                     Central Province – K4.3 million being 5% of GST Distribution.

§                     An allocation of K1.5 million is provided for the design (and possible matching contribution) of new city hall. The Commission must complete its new city hall before May 2009 to save the rental of K2.4 million per annum. The construction will be funded through external loans and will be refunded through rental savings.

§                     Home ownership scheme K3 million (The allocation to HOS is increased because we are moving towards construction stage).

§                     All other allocations remain same as that of 2006.

§                     NCDC news was scrapped off completely since 2005; however will be revived in 2007 with less frequency and an allocation of K0.3 million is made.

Engineering

About 37% of the total budget or K46.83 million goes to the Engineering Division. Major activities of Engineering in 2007 would be;

§                     Completion of the 2006 approved roads K11.3 million.

§                     Reconstruction of Waigani Drive between City Hall to the Korua Way – K20 million. The balance will be met through loan funds or will be carried over to 2008.

§                     Pothole patching and minor works will continue as usual with the allocation of K4.50 million.

§                     Foot paths will be constructed in selected roads with an allocation of K0.5 million.

§                     Drainage construction will be taken up in a small scale manner with an allocation of K1 million.

§                     Streetlights receive similar allocation of 2006 to extend the lighting to the minor roads and planned settlements – K3 million.

§                     Vehicle replacement program receives same funding of K1.0 million basically to replace the operational vehicles.

Community & Social Services

About 25% of the total budget or K30.77 million goes to Community & Social Services Division. Major recipients of this slice would be:

§                     K3 million to Education Infrastructures basically to complete projects that have already been commenced and to commence limited new projects in 2007 including supply of buses to the schools.

§                     NCDC would continue the supply of water to schools as per the revised ration arrangement (K0.24 million).

§                     An allocation of K2 million is made for landscaping & parks upgrade and another K2.44 million for beautification programs.

§                     Markets constructions receive a funding of K1.50 million.

§                     NCDC would assist Law & Order programs in the city through urban management and community development programs, while the primary responsibility rests with the National Government – NCDC allocated K0.3 million for urban safety, K0.5 million for crime prevention programs and K0.48 million for community based law and order programs.

§                     Waste management operations receive K3.76 million.

§                    Health related services K2.42 million (for POMGH, Urban Health Clinics and preventive health programs).

§                     Other allocations in C & SS are: public toilets - K0.2 million, cemetery upgrade and maintenance – K0.65 million, Safe motherhood programs K0.9 million and Dog Pound Management fees – K0.23 million.

§                     Allocation to fire Service - NCDC meets operational costs and the State meets the personnel and capital cost. NCDC’s allocation to Fire Services in 2007 is K0.5 million.

§                     Allocation to MKC will be in several forms such as personnel cost, road maintenance, village waste removal, vehicle maintenance, Hiri Moale Festival and besides a financial grant of K2.93 million (2006 - K2.88 million). Overall, MKC operations receive K4.15 million including Hiri Moale Festival.

Regulatory Services

4.5% of total budget or K5.6 million goes to Regulatory division that would focus on strengthening regulated functions and enforcement of Physical Planning, Building and Licensing Acts.

Regulatory Services would concentrate on capacity building, one-stop-shop concept, drawing local area plans (K200,000) and implementation of the Hetura Project – K1 million.

Besides, an allocation of K1 million is made for the Urbanization programs basically to do surveys, development and construction design for settlements and to implement pilot water projects to planned settlements and Fishermen Islands.

Finance & Admin

About 16.8% of the total budget or K21 million goes to Finance & Admin Support Divisions to meet the centralized costs. Major recipients of this slice would be:

§                     Botanical Garden is allocated with K0.99 million. Negotiations are also underway to transfer the Garden’s management back to UPNG.

§                     Allocation to Security Services is maintained at K1.2 million.

§                     Central admin services receive a total of K7.5 million to meet the cost of inter alia; utilities (K1.78 million), rentals (K3.7 million), insurance & workers compensation (K0.22 million) and property maintenance (K1.19 million).

Thank you for listening to my maiden budget speech. The 2007 budget is now before the Board and I seek your co-operation in passing the budget.

Thank you.