OfReg aims to be self-sufficient

| 24/07/2018 | 77 Comments
Cayman News Service

Alee Fa’amoe

(CNS): The new Cayman Islands utilities regulator has received a cash injection from government coffers to help with the goal of the relatively new watchdog to train staff and eventually become a self-funding body committed to ensuring the safe and fair provision of power, water, communication and fuel. Utility Regulation and Competition Office (OfReg) has been criticised for spending over $1 million on consultants last year and over $370,000 on training and travel. But the regulator is tasked with ensuring the health and safety of the utilities we access, value for money and consumer confidence in a diverse range of areas. 

OfReg said on Monday that it had received confirmation that the 2018 funding is now in place for the fuels sector, and that arrangements for sustainable revenue sources from the water sector are still in discussion with Cabinet. 

The regulator was initially promised funding to finance the transition and startup costs when it was launched, merging the Information and Communications Technology Authority, the Electricity Regulatory Authority and the regulatory arm of the Water Authority, as well as creating a new fuel regulator. However, the money was not appropriated in 2017 and officials from OfReg said that it ran at a loss during its first year.

“It is common practice for government to provide initial funding to get regulatory bodies organised and functioning efficiently so that they can become self-sustaining,” said OfReg CEO J. Paul Morgan. “This means covering initial staffing costs, training and development and other operational costs such as office rental and equipment.”

He explained, “Although OfReg ran a loss in its first year of operation because it did not receive this initial funding, the ICT and electricity and sectors are already self-sustaining, proving that the model does work as the regulator ramps up its activities in providing the consumer protection services which it is mandated to provide without being a drain on the public purse.”

OfReg aims to be completely self-sufficient, funded by regulatory fees required by law, by the end of 2018, eliminating the need for money from the public purse. But in the meantime, it still needs to train staff and cover the cost of establishing the necessary components to regulate so many different but essential sectors, given the size of the local market and the lack of real competition among local utilities.

Following the recent release of OfReg’s travel and training expenses, Deputy CEO Alee Fa’amoe appeared on local radio show, CrossTalk, to explain why the regulator had incurred so much spending in its first year and that it would soon be paying its own way. He explained that almost half (44%) of the spending was on developing the team through specialist training.

He said OfReg also represents Cayman at key conferences, especially relating to the .ky domain, which, together with regulatory conferences, was another large chunk of the expenditure.

Fa’amoe said that the regulator had not been fully funded in the first instance, and although he was not sure why, he denied that government was setting up the new agency to fail, as suggested by host Woody DaCosta. He said that when he and the board chair approached the ministry and Premier Alden McLaughlin, who is the minister responsible, they were able to get what was needed.

He also urged people to bring their concerns and complaints to the new regulator. Fa’amoe said members of the public are spending an awful lot of time on social media complaining about the utility providers, and in particular the telecoms sector, but they are not filing official complaints so that OfReg can tackle the problems.

He said that in 2017 the regulator received only 52 complaints across all of the utility sectors that it regulates.

See the OfReg annual report and the team’s travel expenses in the CNS Library

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Category: Local News

Comments (77)

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  1. Anonymous says:

    caymanians complain a lot ….buy do nothing about current state of affairs….better be careful, we might wind up like Nicaragua at the moment with civil unress….the lodge will continue its quest for power…..????

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  2. Roger Davies says:

    We have some very valid criticism here, but it would carry much more weight if the writers submitted it to the Compass online under their own names. Then we might see some action taken on this debacle.

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    • Anonymous says:

      Pray tell what good has ever come from one of your or the four other Compass commenters posts?

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    • Ron Ebanks says:

      I say with the kind of arrogance I am reading and wasting of money about him and the the other heads of OFReg . I say start another petition to desolve OFReg , and put them to regulate the dump .

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    • Anonymous says:

      nothing to be gained from posting your name….except discrimination & victimisation…its how the locals try and control expats

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  3. Anonymous says:

    Let us not forgot that these mostly redundant former C&W/LIME/FLOW personnel, through cronyism, were hired to create the so-called e-government. To date this has not been achieved except in one limited low revenue area. What is even more shocking is the statement that these conferences and training are necessary to make them the ‘best of the best’ but I thought that they were the best in their fields. This is why the public is fed up with a dangerously obese civil service. Dear CIG what took place in Greece and other American States, cities and counties can happen here if you don’t reign in spending, reduce the national debt and shrink an obese civil service! I’m apolitical but a very concerned citizen and public servant.

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  4. Docktor Cango says:

    Boy they sure can travel and are the Jet set crew and love to profile themselves on the Facebook too! but what are you guys complaining about this is the ppm mixed up with the worst elements of the udp What exactly do you honestly expect them to do??? but spend spend spend and more spending like its 1999 ooooooh yeah !!!!!

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  5. Joe Kidd says:

    OFReg proof that Nepotism is still alive and well in Govt. A govt entity run by the lodge for betterment of the lodge. Nothing has really change previous boss ICTA did the same even sold our domain name only difference is the Brits were incharge. What i want to know is why for some very odd reason we are inundated or invaded by Caribbean born honchos right after Caribbean based fuel companies took over operations from Texaco and Esso. I would also like to know is exactly just how that chief fuel inspector got his job and what has he done about safety and compliance to fuel industry standards and price regulation?

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  6. Anonymous says:

    This is crazy on so many levels…
    “we need an authority to keep costs down for the consumer!”
    “I know, lets immediately raise the cost to consumers!”

    sounds legit.

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    • Anonymous says:

      And one would think that the purpose of centralizing this regulatory oversight function was to eliminate the duplication of costs at the decentralized level. Clearly in this world 1 + 1 = 11

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  7. Anonymous says:

    Last time I checked we had safe, reliable and relatively cost effective sources of water, telecoms, fuel and power. Just go to any other Caribbean country and you will see just how effective and good the systems are here.

    So why the hell do we need this asinine government agency that travels the world spending tens of thousands of dollars and by its own admission doesn’t even have the skill set or knowledge to do the job it is set up to do? This truly is lala land these days.

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  8. Anonymous says:

    Self-sufficient is a bit of a misnomer when you decide that the people you regulate should pay whatever it costs you to operate. And there appears to be no skimping on operating costs!

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  9. CAD says:

    Another bureaucratic layer added for those in power wishing to reward friends and sycophants… 0% return on the dollar. Prices will continue to skyrocket, while OfReg eats caviar.

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  10. Anonymous says:

    Close the Authority and create a new dept called OfReg Dept which reports to chief officer Ministry of Works. Transfer the lawyer to AGs team. All this will save $$$$$$.

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    • Anonymous says:

      Sounds good except there is no capability there either for any type of contribution except chicanery of course.

  11. Anonymous says:

    Wow! Pure noise from all these pro bloggers. Try this – give it a rest or launch a reality TV show demonstrating how perfect you are at solving all the world’s problems.

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    • BTC says:

      Wow! Sounds like your comment was a bust. Perhaps the noise from all the bloggers is valid. $6 million for 22 employees? That works out to approximately $273,000 per employee. Money well spent?

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  12. Anonymous says:

    why are people surprised?…just read miller-shaw or e&y reports…

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  13. Anonymous says:

    get the auditor general to investigate ofreg asap.

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    • slayer says:

      lol wont happen!
      Read the Uk side of what happen to the governor! Think he came here and rocked the boat to much with all these utility companies and questioned everything thats going on. Plus our leaders of Gov all have shares in one of the major companies.

  14. slayer says:

    Have a look at what they are driving! lol
    Loaded Chevy truck and Tahoes right down to the secretary.
    Also why aren’t they in the main Gov. building?
    More rent being paid out 😉

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    • Anonymous says:

      Your so right! These vehicles are not even branded.

      Shouldn’t they be as they are paid with the public’s money and by right Govt vehicles.

      Guess they don’t want the public to see when they’re at the bars at night, cigar rooms and pulling their boats to go to rum point.

      Or when they families are driving them!

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  15. Anonymous says:

    Sorry gents you can’t defend that level of travel. I call on the Board to take control of this mess. After all the Board is full of private sector employees.

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    • Anonymous says:

      Have to agree. Very little training is shown on the report in the Compass. Appears that they have inherited or hired a lot of bodies who cannot cut it so they needed plenty professionals as consultants. BS only takes you so far !

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    • Anonymous says:

      The board is a part of the problem

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  16. Anonymous says:

    I ask again, do the persons running the asylum, know that they are inmates too?

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  17. Anonymous says:

    The ‘Regulator’ will tax the utilities to fund their crazy spending and the utilities will increase their rates to offset their regulatory costs, costing consumers more. Wasn’t OfReg formed to protect the consumer? Madness!

    And why such a stupid acronym OfReg? How about URA, Utilities Regulatory Authority or something of the sort that makes sense?

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    • Anonymous says:

      This is probably why Water Authority put up their fees to cover their contribution to OfReg. We’ll probably see similar increases from CUC and telecoms.

      Why do we need another entity regulating Water Authority? One should go, just merge WAC into OfReg and fully privatize the water & sewage businesses.

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    • Anonymous says:

      True!

      URA (utilities regulatory authority) or URC (utilities regulatory commission) makes sense – this OfReg thing is foolishness.

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    • Anonymous says:

      “…that makes sense”? Surely that would not be “Government Kind!”

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    • Anonymous says:

      So Famoe and other members of the private sector join the public service and this is what happens.I keep reading about how much better the private sector is. Really? Is this what happens when we allow a private sector mentality.

      The civil service operates so much better than these run away public sector bodies.

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      • Anonymous says:

        Came from private sector yeah,but did wha exactly!

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      • Anonymous says:

        They don’t even care about Caymanians seeing what they are doing with our money, no enforcement of duty of care with the government’s money and if we try to get support from UK, the brainwashed Caymanians now claim it’s the UK’s fault when we are electing and hiring these people!

  18. Anonymous says:

    lodge doors are open….????

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  19. Anonymous says:

    The gravy train rumbles on!

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  20. Anonymous says:

    ofreg is one big expensive joke….sums up everything wrong with cig and the civil service.

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  21. Anonymous says:

    Another monster created by our illustrious, smart, intelligent politicians. I remember hearing the reasons for the creation of this Department/Organisation was to bring down our Electricity, Water, Phone, Fuel, and TV rates and everything was going to be a lot cheaper. Well, the exact opposite has happened and folks if you believe we were paying high rates for these services before, just wait until OFREG finish imposing these exorbitant fees on the utility companies so they can continue paying themselves huge salaries and Globe trotting. Why are we so stupid? Who do you think will pay for all this nonsense? We, the consumers, the utility companies will not pay these fees, they will be passed on to us to pay, so very shortly all these utilities will see increased rates. This Department/Organisation must be disbanded and consigned to the scrap heap immediately.

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  22. Soldier Crab says:

    This is a prime example of unnecessary bureaucracy; a lot of highly paid people with little or no knowledge of what they are doing inventing obstacles to the smooth provision of services.
    Now all of the licence fees from the utilities go to paying these people instead of contributing to central government funding.

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  23. West Bay Premier says:

    I say desolve OFReg and transfer their jobs to mount Rushmore .

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  24. philip says:

    So we as consumers of Utlities are the ones whom are going to get stuck paying for this , because the providers are not going to absorb these fees, so what happens, passed on to the consumer, how about these guys give us a clear reason why we are now paying close to CI$5.00 for a gallon of Gasoline, if they can not then as far as i am concerned a useless department that should be shut down.

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    • Anonymous says:

      75c of that $5 is already government’s Duty on gasoline and now OfReg is about to increase the cost to import with more regulatory fees!

  25. Anonymous says:

    Jobs for Freemason brethren. Look at the board of directors and management.

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  26. Anonymous says:

    A 22-person unit with a $6 million budget makes it hard to see where they are saving us money.

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    • Cayguy says:

      Not to mention all these new costs to be passed on to Utilities and Fuel will ultimately be passed on to the consumer along with top exuberant jobs of which skillsets were lacking. How that actually saves money and helps Caymanians and locals is a bad joke in and of itself. Just another bloated govt authority with frivolous spending habits.

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    • Anonymous says:

      yep…. 22 people that still need to pay outside experts to their job….
      welcome to the caymankind wonderland

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    • Anonymous says:

      plus they are actually costing consumers money

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  27. Anonymous says:

    is this a joke? 1 power company. 2 water companies. 4 (?) telecom companies. 3 petrol companies. Tell me again, how many monkeys does it take to eat a banana?

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    • Anonymous says:

      actually, I don’t think it is a joke at all. telecommunications, energy, water, electricity, fuels – we kinda need all of these things to live! I am glad that they are getting organised and thinking about the future of these sectors and how much we have to pay for these services. I am quite happy to have an independent authority looking after this – particularly as all of the sectors are currently monopoly/oligopoly! supervision is needed

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      • Anonymous says:

        I think you missed the point. It is very important but please tell me how 1.4M in 1 year is justified when there is absolutely NO VALUE. I swear, YouTube offers as much regulatory advice on these points as this sham regulatory body does. How hard can it possibly be to regulate 7 different entities? CIMA regulates thousands of entities which are all much more complex than the price of OIL. Go to http://www.cnnmoney.com and track the price of oil futures and compare it to the prices at the pump.

        ‘power corrupts; absolute power corrupts absolutely’

        How did we achieve the last referendum and; can we please do that again? Get these pigs out of office.

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      • Anonymous says:

        yes we need EFFECTIVE supervision

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    • Anonymous says:

      Real joke, a bunch of ex-telecom employees regulating the industry. Yea, we will get real value for money…. very progressive.

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      • Anonymous says:

        True.. We should use fishermen instead..lol

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      • Anonymous says:

        But at what level they were, how many of them even ran a budget?

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      • Anonymous says:

        Just shows you the farce that politicians and one particular former perennial
        ” Permanent” Secretary were led to believe by the former monopoly provider claiming that they were spending so much on staff development. Blindsided good and proper with skills that are hardly transferable in the local economy when compared to other local utilities. Left them and the country with plenty of specific equipment training for their own purposes and now clearly a national deficit of required skills. Just shows our own local shortsightedness when it comes to educating training and developing Caymanians for future roles and requirements. We can’t seem to learn and wonder why we have to import labour. Take a look at other Caribbean countries and at least there is emphasis on education from the Bahamas down to Trinidad, whereas we spend so much on the superficial. The thinking people, the thinking and the mentality that surrounds is in need of updating.

    • Anonymous says:

      This comment must be a joke.. like they say..”opinions are like…

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    • Zack says:

      Silver lining: Did anyone notice how much revenue Ofreg collected for CI Govt? Almost $8 million in royalties. That doesn’t include fuel or water sector royalties…yet!

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    • West Bay Premier says:

      11:57am , one smart one . but in this case you have about 15 to 19 .

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