St Helena : St Helena Executive Council Report (15-18 July 2008)
Submitted by Saint Helena Herald (Juanita Brock) 02.08.2008 (Article Archived on 16.08.2008)
Last Friday was a particularly busy and eventful day. We had an informal Legislative Council in the morning and an Executive Council in the afternoon.
ST HELENA EXECUTIVE COUNCIL
15 AND 18 July 2008
Last Friday was a particularly busy and eventful day. We had an informal Legislative Council in the morning and an Executive Council in the afternoon. Some very important topics were discussed at both meetings. In addition to that, we had confirmation that Councillor Reid will be taking up a new job shortly and therefore have to resign his position as Councillor. All of us that have worked with John will miss his wisdom and commitment. As Governor I am very sorry to lose him as a Councillor, but in his role as Registrar to the Supreme Court he will still be serving the community here, and that is something he has done with distinction in the past.
I do not usually comment on Information Legcos, but I believe that during our morning session we dealt with an item that is of specific interest to the public. There has been a great deal of concern expressed over the issue of the potential relocation of some small businesses that currently operate in Half Tree Hollow. Councillor Leo has been seeking clarification of the situation for some time; in fact he proposed a motion in Legislative Council that the matter should be investigated.
So on Friday we brought the parties together – the owners of the businesses involved and the Chairman and Managing Director of the Development Agency – George Stevens and Linda Houston. It was evident in the early part of the discussion that Linda had been absolutely correct in following the land use plans that had been devised by the Legal and Lands Department and subsequently approved by Executive Council. The businesses are currently operating under a three year lease and they had been given notice that they may have to relocate when their leases come to and end, because it was planned that the zone they are in would become an area for “clean” businesses. That means those that are not noisy or dusty. However, these are well run businesses that claim to employ 30 Saints, and the degree of consultation about the Land Use Plan had obviously not succeeded in accommodating their views. The fact that the owners had made significant investment in the buildings with the agreement of the Development Agency indicated to us that the fairest solution would be to look again at the designation of this land and take some account of the wishes of those using it. We therefore undertook to do just that, and promised the businesses concerned that we would discuss the situation with them throughout the process.
This discussion showed us the kind of the problem that may arise while we are preparing our economy for the impact of the airport. We will have to work hard to ensure that we achieve a balance between those changes that are necessary, and the protection of our environment and way of life. Of course we need to maintain our natural environment as best we can, the wirebird is important to us. However I could argue that our small businesses are even more important.
They should be the core of our economic growth, and they must be encouraged to benefit from what lies ahead. Obviously we welcome inward investment – it will increase wages and bring all kinds of unexpected benefits, but the policy of the government and the SHDA is to welcome ALL investment, especially that from Saints. Growth in our economy will be best served by making sure that local people own, and enjoy the fruits of, thriving businesses.
The Info Legco also discussed the issue of the price of electricity. Some of the questions raised by Legislative only Councillors last week had not been answered to them directly, although Exco had been satisfied with the explanations. This meeting provided the chance for all Elected Members to have their say. The Financial Secretary took us through the figures once more and all the questions were answered. Although Councillors regretted the fact that electricity prices would have to rise, there was agreement that the figures being studied were correct, and that the rise in the price of fuel across the world could not be resisted.
That led towards the final discussion on the subject at the afternoon’s Exco. It was said by one Member that the consideration of this matter over several weeks, had been the longest debate that this Council had experienced. So what do the figures show us?
We have recently endured the cost of diesel and petrol at the pumps increasing by just under 40%. The cost of diesel to the power station has suffered the same increase. Diesel represents about two-thirds of the cost of electricity, and about two-thirds of all the diesel that arrives at Rupert’s is used in power generation.
At present we are nowhere near paying the true cost of our electricity. In fact if we include such items as essential administration and depreciation, we are recovering well under half of the total. By administration I mean the cost of employing and supporting those who work in the generation, management and maintenance of our supplies of electricity, and by depreciation I mean the amount that we should set aside each year in order to be able to replace generators and other parts of the infrastructure when they wear out. The agreement signed with DFID last year means that we intend to manage our affairs so that we actually pay the full cost of our power by 2015/16. You will realise that moving from below 50% to 100% involves at least a doubling of the charge over the next seven years. A steady path towards that goal, often called “full cost recovery,” has been further deflected by the recent increase in the cost of oil and the fact that the change in the tariff last December was a failure in that it meant we actually recovered less of the cost than if we had left the system alone!
The proposals that I am outlining now should enable us to pay for 51% of our electricity cost in the present year ending in March 2009, and we hope 70% in the following year. That remains well short of the real cost and we will not be beginning to pay for administration or depreciation. That jump from 51% to 70% does not mean that next year’s increase will be 20% of the cost. The rise from the low figure of 51% to 70% next year is because we have lagged so far behind in first part of this year. From 1st September onwards we should be running at an annual rate of 70 % recovery. Exco advised that these new prices should last until the end of the financial year and thereafter be reviewed annually. We also agreed that if the price of oil drops, then the savings will be passed on to the consumer at the relevant review.
From 1st September 2008 Standing Charges will be £20 per quarter for single phase and £30 per quarter for triple phase. This charge is sometimes called the “meter” charge, and it is represents the ongoing cost of actually maintaining the supply of power to a property. It is felt fair that those Saints whose homes are unoccupied while they are abroad, should also pay this as their homes still benefit from being connected to the grid whether they are consuming electricity or not.
Also on 1st September the charge for consumption will be 15p per unit for the first 400 units, 25p per unit for the next 600 units (401-1000) and 30p per unit for any above that. This means that the heavy user of power will pay more, and those who use less, will pay less. The new rates are not directly comparable to the old ones as the threshold for the lowest users has been raised from 300 units to 400 units. The details of these increases will be included in a separate press release today.
You will remember that 1st September is also the date when the Income Related Benefit will increase. So where does all this leave us? The answer is that most of us will be poorer. However there are some positive points that emerge from this difficult situation:
• We now have a mathematical model that enables us to understand our usage and costing of electricity with far greater accuracy than before. For that we must thank Janet Lawrence and other members of the team. If the work had not been done so thoroughly we were in danger of overspending to a significant extent and that would have slowed economic development. We can now have far greater confidence that we are planning realistically for the future.
• We also have a new Income Related Benefit scheme that provides help to those who are the most vulnerable to this kind of rise. Alongside that we have initiated support in the payment of the Standing Charge for those families where there is only one wage earner.
• I am in the process of setting up a Working Group that will concentrate on looking at every aspect of how we can reduce these costs, and
• DFID has already been very helpful in coming up with initial ideas as to how we can improve the situation. I explained in my earlier broadcast that although DFID are not able to assist us with a direct cash injection, as that would mean the same thing would have to happen next year and so on. However, they are prepared to help with schemes that lead towards a lower dependence on imported fuel. That approach has clear long term benefits. I will be able to say more about the prospects for this in the future.
That brings me to the other substantive item at Friday’s Exco – consideration of the Application of Development Permission for the airport. This is a huge issue and the files are many and varied, but the whole point of this meeting was to decide what conditions we will be placing on the development as a result of recent public consultation.
There is a clear process here:
1. The public have been made aware of the details of the development,
2. There were a number of well advertised meetings during the recent visit of Nigel Kirby and Sharon Wainwright,
3. Following that, there have been a number of submissions in writing from the public as a result of those details and meetings.
4. So yesterday Exco went through every submission and considered whether conditions should be placed on the development in the light of what members of the public had suggested.
5. Exco then advised on those conditions, and every single point that had been raised by the public was accommodated. Let me give you an example. You will remember the protest made by UPLIFT, a lobbying organisation fronted by Joe Terry.
They were concerned over the fact that the materials being used on the terminal building and the design of the building itself, were not as attractive as they would like. The artist’s impression of the terminal was no more than a first impression and in no way presumed a design, but nevertheless it was enough to generate concern. At Friday’s meeting Exco were able to respond to that by advising that “Construction of the terminal and combined buildings may not begin until detailed design (including external and internal construction material and finishes) have been approved by Governor in Council”. Most of the other submissions were environmental in type and I believe that we were able to apply suitable conditions to those as well.
This is not the end of the matter, merely a step on a long road, but progress towards permission for a satisfactory development was made.
Finally let me return to the oil situation: you will doubtless know the story of King Canute, the English king who is remembered as sitting on a beach getting wet as the tide came in. He is often mistakenly imagined to have thought he was powerful enough to resist the tide. In fact the opposite is the truth – he was showing his court that his power was limited and there were certain matters he simply could not control. From letters in the local papers it is clear that some of you believe that your Council has the power to resist the huge wave of oil price increase; I believe we can no more do that than Canute could command the waves. What we have had to do is painful, but it means that we remain on course for a more promising future.
AMG, 21st July 2008
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