{"id":19345,"date":"2019-03-18T09:18:38","date_gmt":"2019-03-18T05:18:38","guid":{"rendered":"http:\/\/www.mauritiustimes.com\/mt\/?p=19345"},"modified":"2019-03-26T12:22:59","modified_gmt":"2019-03-26T08:22:59","slug":"national-insurance-company-an-uninformative-communique","status":"publish","type":"post","link":"https:\/\/www.mauritiustimes.com\/mt\/national-insurance-company-an-uninformative-communique\/","title":{"rendered":"National Insurance Company: An uninformative communiqu\u00e9"},"content":{"rendered":"

Political Caricatures<\/u><\/span><\/h4>\n

\"\"<\/span><\/p>\n

A communiqu\u00e9 that shrewdly avoids the controversial issues. In non-controversial language it does inform us that the National Insurance Company (NIC) parted ways with EY Mauritius (Ernst & Young) because the two parties \u201ccould not come to an agreement\u201d on certain matters and that the audit exercise was \u201cmore complex and time-consuming than a standard audit\u201d.<\/span><\/p>\n

What were the issues that EY Mauritius could not agree with NIC? Was it with regards to the valuation of the assets of the company or was it on the future liabilities of the NIC which the ex-auditor PWC had warned as being toxic because the asset valuation was over-generous? The audit reports of the NIC by Moore Stephens for the years ended 30 June 2016, 2017 and 2018 are expected by 30th June 2019.<\/span><\/p>\n

We are also being told that NIC has embarked on \u201ca comprehensive long-term strategic review, with a view to enhancing value for the benefit of its stakeholders, including policyholders, staff, salespersons and prospective clients\u201d. For a proper long term view, an audit report of the economy is not enough; we need a proper actuarial review because we are concerned with the whole set of overgenerous investments and insurance policies passed on from the ex-BAI in April 2015 without a proper assessment. Only such an assessment will indicate whether the insurance company cannot cover these toxic liabilities or will need further capitalization by Government. Why was such an exercise, which would have recommended whether or not to continue with or to write off these toxic insurance policies, not carried out at the time of incorporation in April 2015? The public would also want to know the impact of further capitalization of the NIC by the Government on Public Sector Debt\u2026 if it comes to that.<\/span><\/p>\n

* * *<\/span><\/p>\n

New thermal power plant of Alteo Group<\/strong><\/span><\/h4>\n

\"\"Negotiations have been concluded between the Central Electricity Board and the Alteo Group regarding the commissioning of a new thermal power plant. Alteo will be installing a new thermal power plant with boilers twice 35 MWh and with higher pressures using bagasse and cane leaves. This Rs 7 billion project will be operational by 2021. Deputy Prime Minister Ivan Collendavelloo is pleased that negotiations have been successful and that both parties have reached a consensus that will boost the development of green energy and our cane industry. It is to be noted that this project had been proposed several years back and that negotiations with the government had proved very laborious.<\/span><\/p>\n

Usually these power plants are largely bagasse- and coal-fired cogeneration plants. They use bagasse during the sugarcane crop period, and coal outside that period to generate steam and electricity for the national grid. Does it mean we are going back on our commitment to reduce our dependence on coal for energy production, and hence increase our dependence on Independent Power Producers (IPPs)? Is it again a repeat of the same old story with our dear politicians raising the scare of possible blackouts to rush to the rescue of the IPPs by offering them cast-iron contracts totally to their advantage while binding the CEB irrevocably to these producers?<\/span><\/p>\n

Moreover, electricity generation is one very profitable way of safeguarding the cane industry against its losses in the production of sugar. Curtailing the country\u2019s dependence on the local IPPs would have hurt the forever distressed cane industry, thus we should not be surprised that our dear politicians are up to their old tricks while we consumers continue to pay the bills.<\/span><\/p>\n

* * *<\/span><\/p>\n

La \u201cVille des fleurs\u201d needs a refurbishing<\/strong><\/span><\/h4>\n

\"\"<\/span><\/strong><\/p>\n

The City of flowers, which will have the metro zigzagging through it,requires a major relook. Our town councillors seem the least bothered, appearing to be more preoccupied with \u201cKentucky\u201d than about engaging Quartre Bornais, urban thinkers and other professionals about their ideas of the Quatre-Bornes of tomorrow.<\/span><\/p>\n

Quatre Bornes, the heartland of many lively debates, political activism and battles and prized for its lovely suburbs and its cocktail of different juxtaposing cultures, is gradually losing its charm. Indeed, we are concerned about the present state of the town and are quite disappointed with the mess all around. Day by day, it is growing more anarchic without any attempt at regulating, among others, hawkers and street food vendors. The latter with their vans and clutter of shacks and pop-up shops have in many important alleys and main roads in the city centre taken up public spaces besides being a hazard for drivers and a nuisance for pedestrians.<\/span><\/p>\n

Whist it is true for every city that some areas are best avoided, it\u2019s even worse in Quatre Bornes. Insecurity has spread to its main suburbs and the city centre which have become quite unsafe at night thronged as they are by prostitutes and drug peddlers. Residents of Quatre Bornes await the Metro with trepidation. The urban metamorphosis taking place in Quatre-Bornes, one of the fastest growing towns in the country, rivalling Port Louis and Ebene, has to be better planned. Yes, we have our hawker culture but it needs to better organised and disciplined – a thorough makeover such that it blends with the city\u2019s architecture and surroundings without encroachment.<\/span><\/p>\n

The city needs better councillors and managers. We\u2019d better be careful when it comes to choosing our representatives for the city and make sure we elect councillors who will devote their time to generate new ideas, greater support and more investments rather than indulge in public spats with their personnel on petty matters. At the very least, could they do with a sprucing up and give a bit more care and attention to the overall cleanliness in the city?<\/span><\/p>\n

* * *<\/span><\/p>\n

Appealing to women voters?<\/strong><\/span><\/h4>\n

\"\"<\/span><\/strong><\/p>\n

The race is on! No matter what our political beliefs, there’s one thing we will have to agree on: we’ll be inundated with election coverage and election messages of all sorts from various sources – some factual and objective, some exaggerated and sensationalised. So much importance is given to the language in these political messages because they affect people\u2019s attitudes about political candidates and parties, and more generally about elections.<\/span><\/p>\n

International Women\u2019s Day was an excellent opportunity for our political parties to frame their message such that it has maximum impact on their various audiences. For the governing party the political message is clear: \u2018When the time comes to decide, you will have to support us because we have done so much to empower women.\u2019 More goodies are coming their way; women entrepreneurs will be able to borrow from the bank up to Rs 500,000, without guarantee and at a rate of interest of 3% over the entire duration of the loan repayment period. In addition, 40% of the space of new industrial parks will be reserved for them. An Integrated Support Centre for victims of domestic violence will soon be launched.<\/span><\/p>\n

For the Labour Party, the opening of more nurseries and pre-primary schools all over the island will help in creating more employment for women. The LP also intends to review both maternity and paternity leaves to make life easier for young mothers and working couples.<\/span><\/p>\n

The MMM blames the present government for the precarious situation of thousands of women as a result of the closure of Palmar Ltd. The PMSD-MSM-ML government changed the law regarding severance allowance to the detriment of workers and women. They are now taking the commitment to review the law once in power. They want to see Mauritius as a member of the UN\u2019s International Council of Women (ICW). It will not be that easy to woo women voters, equal players in our society, who will need more convincing policies to be swayed to any side. Indeed, not that easy!<\/span><\/p>\n

* * *<\/span><\/p>\n

Morne Brabant IRS: What was the deal?<\/strong><\/span><\/h4>\n

\"\"The promoters of the Morne Brabant Integrated Resort Scheme (IRS) are suing the state for a compensation of several billion rupees. What is this dispute all about? Has compensation been paid by the state to the promoters of this IRS? Rezistans ek Alternativ<\/em> (ReA) is asking Government to make public the deal with the promoters in public interest.<\/span><\/p>\n

ReA reminds us that the Morne Brabant IRS project was floated even before the site had been inscribed on the UNESCO World Heritage List. This tourist project has resurfaced with the recent publication of a notice in the press about the Building and Land Use Permit for the project that comprises the construction of eight villas, a restaurant, a wellness center, a movie theater.<\/span><\/p>\n

Stefan Gua found “weird” the words of Steeve Magdelaine, president of the District Council of Rivi\u00e8re-Noire reported by l\u2019express <\/em>in its edition of Thursday, March 7. One official would have said that the Building and Land Use Permit application had not yet been filed with the Black River District Council.<\/span><\/p>\n

The spokesman for Rezistans ek Alternativ<\/em> believes the District Council was informed long before the publication of the notice. The promoters of the Morne Brabant IRS has entered an action in court against the state, as they had not been able to exploit the economic potential of their lands because of its World Heritage status. The compensation being claimed from the state is Rs 1.8 billion.<\/span><\/p>\n

The case was brought before the arbitration court, with the option of going to the Supreme Court. And now, out of the blue, there is this application for a Building and Land Use Permit. This is why Rezistans ek Alternativ<\/em> intends to write to the competent authorities for explanations.<\/span><\/p>\n

For the ReA spokesman, the work at Le Morne Heritage site is still ongoing. Archaeological excavations could not be done because there was no access to these lands. For ReA, Le Morne Heritage Trust Fund also has its responsibility in this whole affair: “Any request concerning the area must be approved by the Trust Fund. They will have to explain.\u201d <\/span><\/p>\n

ReA concludes by asking the “fundamental” question: why did the state not use the provisions of compulsory acquisition of lands around Le Morne Mountain, for the sake of safeguarding a World Heritage site?<\/span><\/p>\n

* * *<\/span><\/p>\n

More policies to close gender gaps<\/strong><\/span><\/h4>\n

\"\"Women outnumber men by 13,159 as they live on average seven years longer than men. In spite of being fewer in the labour force, women are more numerous among the unemployed although unemployed women are generally more qualified than their male counterparts whereas average income tends to be lower for women than men \u2013 Rs 16,800 against Rs 22,300 monthly in 2017. There has been a net creation of only 4,600 jobs for women since 2015 compared to 17,600 between 2011-2014.<\/span><\/p>\n

We have to raise the labour force participation rates. A large pool of educated women does not currently participate in the labor market. According to a study by the IMF, this low participation rate has led to an estimated income loss in the range of 22 to 27 percent compared to a situation without gender gaps in the labor force. To increase female labour participation, the study recommends the following measures: (i) promote part-time work and flexible work arrangements; (ii) increase the number of childcare centers compliant with minimum quality standards; (iii) increase financial inclusion targeted at micro-enterprises; and (iv) consider the introduction of paternity for women by expanding financial literacy training leave to level the playing field in hiring decisions and pay of women and men.<\/span><\/p>\n

Despite progress in gender equality, politics remains the domain of men. Out of 69 MPs in Mauritius, only eight are women, including three ministers. We are far from the 50 % of women in parliament as advocated by SADC. Why does this gap persist? Traditional parties, which work in a patriarchal and macho system, are not democratic. It is just a “one-man-show”, dynasties, and a \u201cfamily show”. Traditional parties do not engage in serious reflection on the advancement of women\u2026 and when they align women, it’s more of window dressing. The central problem in Mauritius is that women suffer from structural discrimination. The average pay of women is in general 50 % less than that of men. On the other hand, socio-economic advances have not brought more power to women in decision-making bodies, especially in politics.<\/span><\/p>\n

* * *<\/span><\/p>\n

Air Mauritius goes in for a new strategy at our cost<\/strong><\/span><\/h4>\n

\"\"<\/span><\/p>\n

The financial balance sheet of Air Mauritius was published on February 14th. The company recorded significant losses of an estimated Rs 1 billion for the last nine months ending 31st December 2018.<\/span><\/p>\n

Several reasons have been put forward by MK\u2019s management to explain these significant financial losses. Investment in two new aircrafts and the payroll have been singled out. The exchange rate and the fuel price over the calendar period mentioned also contributed to the losses, according to Air Mauritius. Its management has now obtained the green light from its majority shareholder, the state, to rethink and put in place a new strategy for the national airline. As part of the strategy is the consideration that government will inject more money into the company.<\/span><\/p>\n

With an ineptness that only MK management can achieve, the airline is adopting the totally wrong strategy to reverse its present downward spiral and that will come as a cost to the long suffering taxpayers. Are there not alternatives other than simply dishing out more billions of rupees into the airline company just to keep it going?<\/span><\/p>\n

Does it not seem that this new strategy appear to be more of the same old-wine-in-new-bottles that is being tried for the umpteenth time at MK without even attempting to deal with the main causes of the MK debacle: mismanagement, lack of accountability, chronic leadership deficiency and dysfunctions at multiple levels? This is exactly the stand of the Listed Companies Minority Shareholders Association (LCMSA). Simply injecting more money for MK\u2019s survival is not the solution, the small shareholders want the board and management of MK removed before any rescue plan is envisaged. This should be accompanied by better governance and greater accountability. They have also proposed a whole list of small but effective measures to redress the present of affairs.<\/span><\/p>\n

Raj Ramlagun of the LCSMA believes that new strategy will not lead to much:<\/span><\/p>\n

\u00ab On ne peut pas dire qu\u2019on remontera la pente. Il faut mettre de l\u2019ordre une bonne fois pour toutes\u2026 Nous devons \u00eatre en mesure de responsabiliser les gens qui viennent \u00e0 la t\u00eate des entreprises\u2026 pour lesquels leur survie personnelle et le plaisir de plaire au ma\u00eetre qui passent avant tout\u2026 \u00bb<\/span><\/p>\n

* * *<\/span><\/p>\n

The SBM: Need for a new model<\/strong><\/span><\/h3>\n

\"\"The State Bank of Mauritius has been caught napping again after the huge fraud of Rs 932 million involving a Dubai firm for which it had to include in its provisions for bad debts. It seems that they did not expect the last affair to explode again in their faces; they thought that they had filled in all the cracks of the affair. SBM will have to make additional provisions for bad debts. At the 12th floor of the SMB Tower, there is quite a commotion. The audited report of the SBM, dated 31 December 2018, includes provisions for bad debts to the extent of Rs 1 billion. It is again the same Kenyan group, Pabari Investments. The three companies of the group, namely Pabari Distributors, Kotecha, and Unifresh Exotics which benefited from a loan of Rs 4.8 billion (of which only 50% was covered by a mortgage guarantee) from the bank did not repay back the loans resulting in the bank having to make a greater provision of these in its bad debts.<\/span><\/p>\n

The directors of SBM holdings are currently spending sleepless nights. Last time they succeeded in weathering the storm by tagging everything onto a quite docile scapegoat and convinced the shareholders that it was just a blip that would not affect the bank\u2019s overall performance and profits. But now the situation is different with some Rs 2 billion or even more that have to be provided as bad debts\u2026<\/span><\/p>\n

But the bank\u2019s directors have a way out: in line with what is fashionable these days, they should ask for a new \u201cbusiness model\u201d for the SBM and this may keep the shareholders at bay. What this means is that the directors stay put and the shareholders are conned again while the bank’s stock price slides to a new low.<\/span><\/p>\n

As in the case of Air Mauritius, the governance issues are the same. At the SBM as much as at MK, we need more board members who can to respond to technical issues that the fiduciary duties impose upon them and pursue objectives that are in the interest of the company and its shareholders and facilitate effective monitoring that will enhance shareholders\u2019 value.<\/span><\/p>\n

\n

* Published in print edition on 15 March 2019<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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