Financial Secretary Office News

Financial Secretary Office News

Asia Pacific project preparation facility


Recent in-country visits by consultant’s from ADB’s Asia Pacific Project Preparation Facility have left stakeholders enthusiastic about the prospects the facility offers. ICI’s Secretary Ngametua Pokino said his ministry “is excited at the prospect of this facility providing opportunities for capacity building and to enhance our ongoing commitment to working in partnership with the private sector.”

Not yet heard of the facility? Here is some important information for you. The facilities primary objective is to assist governments in preparing and structuring infrastructure projects with private sector participation. In particular they provide capacity related assistance to infrastructure projects like regulatory reform and institutional practices, due diligence and preparation of projects, marketing, tendering and awarding projects as well as project monitoring and project restructuring.

The private sector can benefit from this facility as it creates business opportunities for consultants and contractors and creates project investment opportunities by encouraging governments to tap into the facility.

For more information on the facility and a user guide go to the MFEM website www.mfem.gov.ck or visit www.adb.org. The Office of Public–Private Partnership of the Asian Development Bank commenced operations in January 2016. Target sectors include energy, transport, urban development, and social infrastructure.

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For further information about the Office of Public-Private Partnerships, contact: Patrick Blanchard, AP3F Coordinator, Tel: +63 (2) 632 4444 (ext.70184) Email: pblanchard.consultant@adb.org


Business environment reforms gain momentum

The Government with the assistance of the Asian Development Bank (ADB), Pacific Private Sector Development Initiative’s technical support continues to progress implementation of important business environment reforms. The reforms consist of drafting of a new modernised Companies Act and a Personal Property Securities Act (PPSA) tailored to meet local conditions. The bills, having been drafted, were presented to stakeholders in a visit in August and are now being finalised and will require final endorsement by cabinet, hopefully later this year.

Once the Companies Act has been passed, NZ Aid Programme funding will allow the implementation of a new on-line company registry. ADB together with the NZ Companies Office will support the full implementation of the new law and on-line registry. The new PPSA will allow for moveable property to be used as collateral for loans. The new system which will be supported by an on-line registry will make it easier for individuals and businesses to access finance.

This will bring significant benefits to all local businesses including lowering the compliance and registration costs for incorporating a company, providing greater transparency in the operations of companies and the Act also has the potential to lower interest rates on loans supported by moveable property.

Financial Secretary Garth Henderson endorses the updating of legislation to reduce the cost of doing business in the Cook Islands and supports the increased access to finance for small businesses. He states “this move to greater transparency and cost reduction has been happening across the region and we are very pleased with progress to date. We look forward to the introduction of this legislation in the Cook Islands and will see it bring significant benefits from 2017 onwards”.

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Government serious about disaster risk management

The Cook Islands experiences a range of natural hazards, including tropical cyclones, tsunami, floods and droughts. We face particularly high tropical cyclone risk, with associated high winds, storm surges and flooding. Cyclone risk was highlighted in 2005 when we experienced five consecutive cyclones over a period of two months, including four category five storms, causing damage estimated at $14.5 million. Previously, Rarotonga was extensively damaged by Cyclone Sally in January 1997. In November of the same year, Cyclone Martin destroyed about 90% of houses and killed 19 people on Manihiki atoll. The most recent major cyclone occurred in 2010, damaging 78% of houses in Aitutaki, devastating crops, disrupting tourism, and required a $6.9 million recovery and reconstruction program. Recent analysis undertaken under the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) indicates that the country faces an average annual loss of $4.9 million from tropical cyclones alone, with probable maximum losses of $56.8 million, $103.0 million and $198.1 million from 1-in-50, 1-in-100 and 1-in-250 year events respectively, equivalent to 18.8%, 34.0%, and 65.5% of GDP in FY2016.

The Government takes these risks very seriously. In addition to building its’ Disaster Response Trust Fund by a further $600,000 this financial year (fund now totals NZD$1.5mil) and continuing to have Catastrophic Risk Insurance (PICRAFI), it is now working with the Asian Development Bank (ADB) to finalise a Policy Loan of approximately USD$10 million to be utilized if a state of emergency is declared in the Cook Islands. This loan would provide rapid access to a pool of resources enabling government to initiate recovery and reconstruction efforts with minimum delay, mitigating a disaster’s immediate economic and social impact.

To assist us, the loan has some medium term policy actions which will be monitored to ensure we continue to build our resilience for a state of emergency. An example includes the introduction of a damage and loss database and post-disaster expenditure tracking system. This complements existing government initiatives like updating our joint national adaptation plan (JNAP) for disaster risk management (DRM) and climate change adaptation and the implementation of the national action plan specifically focused on DRM.

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