Bureaucracy, Capacity Building Stifling CMC

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Thursday, 21 February 2013 02:30

By caribarena news

Antigua St. John's - Capacity building, and money tied up in Treasury and bureaucracy, are among a series of challenges restricting the development of the Central Marketing Corporation (CMC), and former General Manager Dalma Hill has advised that the Corporation must step away from the bureaucracy and other negative anchors that are stifling its progress.

Addressing the board of directors as he left the organisation last Friday, Hill pointed out that national or corporate wholesale business could never properly exist without a major warehouse.

CMC’s storage is reportedly regularly depleted in less than a week. And according to Hill, a new warehouse facility must be created to facilitate all levels of storage, including freezers, coolers, and dry goods.

During his three-year tenure at the head of the Corporation, Hill recalled that he had successfully sought approval of the PSIP – a stop gap to meet the needs of the PDV and school meals programme – but noted that this was not enough to respond to market competition, especially if CMC intends to move forward as a national wholesale unit.

“Funds for the completion of phase one and phase two of the capacity expansion programme were approved ($1.3m), but still held in bureaucracy at the Tenders Board,” Hill said. This storage expansion project cannot move forward without the required funds being released.

Further, he told the board that CMC, under his watch, has also submitted a proposal for a full 9 million cubic ft storage facility to be installed adjacent to the Montpellier facility the Corporation purchased some time ago.

But unlike the approval received for the other programme, funding was still being sought in the latter regard from several agencies.
Citing hurdle number three, Hill noted that PDV had been transformed, and remains a good source of income for CMC, with the supermarket requiring further renovation to accommodate and “win back” cash customers who seem to always get lost at Bargain Center, located nearby.

“Clearing the dry goods area on the other side of the wall and shifting the PDV cashiers to the inner area will free the cash cashiers to the front and open the supermarket to passing cash customers who make their way to Bargain Center to avoid long delays,” Hill advised the challenged CMC board.

He added that such a move would be imperative if the market had any desire to capture the “impulsive customer” who walks by CMC every day.

“We have not been able to divert their purpose, because we lack the stock and the ready cash system to meet their expectations to shop and come again,” Hill admitted.

Accompanying the concern, Hill told the board that the School Meals programme also remains an annual business for the Corporation that needs to be converted from a written agreement to liquid cash.

“School meals remains a $4m annual business that we have agreement on paper but have not been able to convert. This is institutional business that we should be able to nail down,” Hill said.

He said the Corporation’s lack of adequate storage capacity and stock to respond to schools meals’ requests is undoubtedly connected to politics.

“There is no question that there is politics being played by many of their (School Meal programme) staff, but our lack of infrastructure is also a major obstacle,” the former general manager said.

He went on to advise that while CMC had managed to shift PDV to ECAB to avoid the daily problems with ABl, the issue of overdraft remains a major financial hurdle that must be resolved.

Managing CMC’s debt also remains a challenge, he said, and only so because the Corporation has not been able to access its investment in Treasury Bonds and collect the receivables from the government Treasury. This money is said to be enough to “wipe out” all the corporation’s overseas debts.



He believes that the Corporation’s debt management plan is “durable,” and once outstanding financial statements are ready, negotiations could proceed to get the necessary financing needed to take the corporation forward.

Caribarena sought clarification on the latter point from a senior government finance official who said that Hill’s contention regarding outstanding receivables from the government on its investment in Treasury Bonds simply “don’t seem logical”.

The source said whenever bonds are entered into with the government, the investor - statutory corporation or otherwise - has the option to collect on interest payments before the period of maturity, and the remainder afterwards, or they can simply wait until the entire period of maturity is reached and then collect on a lump sum which includes investment capital with interest.

The source could not speak in detail on matters pertaining to getting monies out of the government treasury that have already been approved for payment.

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