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JUNE 25, 2010
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| Alvin Jacklick pushes change Speaker Alvin Jacklick says Nitijela members should focus on the problems of the nation, not their personal interests. He made the comments in an interview with the Journal Monday and said he is aware of a possible introduction of another motion of no confidence in the upcoming August session of the Nitijela. “I hope members of the Nitijela will look at problems of the Marshall Islands as a whole, and not just their own interests,” Jacklick said. For the Marshall Islands to move forward, it is vital for the Nitijela to change and develop a “working together atmosphere” to solve problems in the country, he said. MEC backs 3-year recovery plan of action The Marshalls Energy Company has endorsed a three-year “Comprehensive Recovery Plan FY2010-12,” which board members say is a roadmap for the utility firm’s revitalization. The plan “identifies areas in need of fixing and the cost,” said R&D Secretary and board member Tommy Kijiner, Jr. “For management, it is a tool that we can use to monitor progress, with deadlines.” Island runs out of propane Sushi, salad and other food items that don’t require cooking will be the only option for many diners around Majuro in the coming week, as the Marshalls Energy Company ran out of propane on Friday last week. “We will have a new shipment of propane on July 1,” MEC’s fuel and marketing manager Bermen Laukon said Tuesday. Meantime, Marshall Islands Resort’s general manager Bill Weza expects that the hotel will run out of propane Sunday or Monday. 'It's elementary, Ministry of Education' The Marshall Islands needs to get more elementary dropouts back to school. That’s the belief of Alson Kelen, who runs Waan Aelon in Majel (Canoes of the Marshall Islands), which caters largely to young people who dropped out of school early in life. Kelen’s concern is there is not enough being done by government to give dropouts the opportunity to get back into the system. “The government says it wants to educate the country,” Kelen said. “But how far do they want to go? Is the government only educating the educated?” Most training programs are looking for high school graduates, he said. This maintains the status quo. “We need to focus on elementary dropouts to help people who fell through the cracks in the system,” he said. |
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PII forces Mobil to drop price
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| SUZANNE CHUTARO Facing a drop in gas sales because of competition from lower-priced PII gas, ExxonMobil went on the defensive this week, instructing the four stations it supplies in Majuro to drop prices to $4.80 a gallon. Pacific International Inc. launched gas sales at $4.80 a gallon two months ago, undercutting Mobil by 75 cents a gallon. Downtown gas stations report that they’ve seen a dramatic decrease in their gas sales since PII opened its gas station past the bridge. Reduced sales at the pump cut ExxonMobil’s sales. Local gas stations told the Journal they were instructed to match PII’s $4.80 price, with ExxonMobil offering a 35-cent wholesale price cut on upcoming gas purchases by the four downtown stations. PII independently brings its gas from New Zealand on Reef Shipping. Informed of the move by the Mobil-supplied stations on Wednesday, PII Chief Executive Officer Jerry Kramer told the Journal that not only is PII aiming to increase its fuel storage capacity to expand sales, but PII has plans to “bring the price of fuel down further.” PII launched its gas station by bringing in 30,000 |
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| gallons of fuel. But Kramer indicated that after just two months, PII has already increased the volume of its imports because of high demand. The station has generated so much business that it ran out of supply for a few days between shipments earlier this month. These sales are impacting the Mobil-supplied stations, that dropped their prices by 25 cents earlier in the month, but were still charging $5.30 a gallon before Wednesday’s dramatic price reduction. One service station told the Journal that they have seen a 75 percent drop in sales as a result of PII’s entry into the market. “The past two months have been painful,” reports one of Mobil’s gas distributors. “Our price from Mobil has been impractical and we operate on very low margins.” The big price drop comes as a relief to local drivers. But a Mobil gas distributor on Majuro says these stations are “really feeling the pinch,” because while they’ve been instructed by Mobil to match PII’s lower price, many of them still have fuel stock which was purchased at Mobil’s higher rate. “We have no choice,” said another Mobil gas distributor. “Our volume has suffered because of PII and now we are just trying to break even and survive.” Meanwhile, the monthly Mobil fuel tanker with about 300,000 gallons of fuel is expected to arrive on Saturday. One distributor speculates their loss in sales seen at the pump has also translated into a large leftover stock at Mobil’s tank farm in Uliga. Most of the Mobil distributors told the Journal that they’ve had to cut their fuel orders by at least half as a result of PII’s entry into the market. | |||||||||||||||||||||||||||||||||||||||||||||||||||
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GIFF JOHNSON The Cabinet over the past two weeks has adopted the most significant reform plans in 15 years, with plans to reduce allowances provided to both government leaders and landowners later this year. The Cabinet approved six policy initiatives of Finance Minister Jack Ading (pictured left) that aim to reduce costs, increase revenues and improve management of “state owned enterprises” such as Air Marshall Islands, Marshalls Energy Company and Tobolar. According to the plans adopted, Cabinet Members will take cuts in their electricity and housing allowances, setting the stage for reductions in other areas. “When I introduced these policies to Cabinet, I said ‘I don’t want my allowance cut,’” Ading told the Journal Tuesday. “I’m comfortable and I’m sure you are too. But we have to think about the future of the country.” He said it was because of President Jurelang Zedkaia’s leadership, Cabinet has taken clear steps for improving the government’s financial picture. The Cabinet approved: |
• Principles for management of state owned enterprises, including requiring them to produce and publicly release corporate business plans, identify essential services they provide while either winding down or privatizing non-essential activities, and have boards of directors that are independent of government and qualified. • An investment from the General Fund to the Trust Fund of $2 million in fiscal year 2011. Ading indicated that he will seek Cabinet approval in the next two weeks of a recently submitted plan for an overhaul of the tax system. Ading said the reductions in spending are being taking “step-by-step” with the goal of reducing these over time. Ading expects the government to save $2.6 million from these cuts in 2011, $2 million of which will be invested into the RMI trust fund. The Cabinet has given the green light to moving these financial reforms forward from October 1 this year, Ading said. He emphasized support of the President, Cabinet and Speaker Alvin Jacklick. “The cuts will affect President Zedkaia and his constituents because of cuts to electricity subsidies, but he supports the plan,” Ading said. The Finance Minister explained that some Nitijela member allowances cannot be reduced or eliminated until 2012 because they are obligated to banks through the end of 2011, when the current Nitijela term ends. “A lot of people may be unhappy (about the reductions in allowances and subsidies),” he said. “But it’s either today or be in trouble in 2024. They are good for the country. I’m doing this for my grandchildren. I don’t want them to ask me in 2024 why we burdened them with all these debts.” |
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| • Public Sector debt management guidelines for 2011-12, which include restrictions on loans and set budget targets for revenue and spending. This requires that any state owned enterprise must have Cabinet approval to borrow money, and puts a ban on government providing loans or loan guarantees to parties outside the public sector. • Approved the Comprehensive Adjustment Program advisory committee recommendations, with reductions planned for 2011 in electricity allowances, lease and rental housing allowances, RMI utility bills, communications, vehicle purchases, fuel, travel and per diem, professional services, and subsidies (excluding Tobolar). |
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| Outer islands copra farmers producing record levels Copra makers may not be getting paid and the Shipping Corporation isn’t getting reimbursed, but copra makers are producing the product at a high rate, according to statistics provided by the Tobolar Copra Processing Authority. Last month was one of the highest months on record for copra received at the Tobolar plant in Majuro. More than 900 tons, the highest monthly total in several years, was recorded for May. Shipping Corporation officials confirmed that the government’s debt to the company for buying copra is over $250,000 and growing. May’s strong 927.74 tons comes after declining copra tonnage since late last year. This largely reflects a decline in shipping, as the aging Shipping Corporation fleet has required greater time in port for maintenance. |
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