The Finance Ministry is still working on a government guarantee policy with the objective of minimizing risks to government’s financial position.
As at September 2011, the total contingent liabilities stood at $1.94 billion, which was an increase of $151 million compared to 2010.
The total contingent liabilities for this year are expected to be revealed in the National Budget next week.
A contingent liability is an obligation of government which has not materialized but could have implications on government’s financial resources if realized.
These are mainly approved government guarantees to get loans for certain projects.
In September last year, state guarantees and contingent liabilities for organizations included Fiji Development Bank which stood at $253.5 million, FEA was $349 million, FNPF was $973.2 million, Fiji Sugar Corporation was $119 million, Housing Authority was $93.7 million, Fiji Broadcasting Corporation Limited was $18.4 million, Fiji Hardwood Corporation was $17.4 million while Fiji Ports Corporation was $39 million.
The Finance Ministry had earlier said that in 2009, the total government guarantee increased as a result of additional guarantees provided to FSC for its borrowings and FEA for the China Development Bank loan to fund the Nadarivatu Hydro Dam project.
According to the ministry, contingent liabilities continue to pose significant risks to the government and measures have been undertaken to keep these at a sustainable level over the medium term.
Permanent secretary for Finance Filimoni Waqabaca is expected to comment further on this issue later today.
Story by: Vijay Narayan
