PEFORMANCE OF THE UNIVERSAL ACCESS FUND COMPANY LIMITED (UAFCL)

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					MINISTRY PAPER No.:________


      PEFORMANCE OF THE UNIVERSAL ACCESS FUND COMPANY LIMITED
              (UAFCL) FOR FINANCIAL YEAR 2006/2007 AND
                FOCUS FOR FINANCIAL YEAR 2007/2008.




1.0     1.0   Purpose of Ministry Paper
1.0

The purpose of this Ministry Paperdocument is to inform Parliament and the public
about the performance of the Universal Access Fund Company Limited (UAFThe
Fund) for the Financial Year 2006/2007 and its focus for the Financial Year
2007/2008.


2.0     2.0   Mission
2.0

The mMission of the UAFcompany is to facilitate the provision of universal access to
the information superhighway by accelerating the deployment of broadband services
island-wide.    This will be achieved through the effective collection and
astutejudicious management of the universal service levy and disbursementing of
such ffunds so collected, in a transparent and non- discriminatory manner. The
resources are used to financeund requisiterequired projects; as well as to analyze,
propose, analyze and monitor the projects of a universal services forfor which the
Fund company will provides resourcesfunding.


3.0     3.0   Core Functions
3.0

                               The Fund will continue to pursue its the mandate as
articulated in its outlined in the first cCorporate pPlan and anticipates an acceleration
of the projects envisaged. The resources of the Fund will be directed toward fulfilling
its core functions and mandate. These are to:

        •Collect the universal telecommunications services obligations levy from
               telecommunication companies;
        •
        •Analyze projects of a universal- service-s obligation nature and make
               recommendations to Cabinet for approval of funding;
      •
      •Disburse funds for the implementation of approved initiatives;
      •
      •Monitor implementation of projects; and
      •
      •     Manage and account for funds collected and disbursed.



4.0   Objectives

4.1   The main operating objectives offor the UAF Fund are:

      •Provisioning of an island wide broadband network that will allow public
             access to the information super highway through hHigh sSchools,
             pPublic lLibraries, pPost oOffices and any other agencies/institutionsy
             approved by the Fund’s bBoard of dDirectors
      •
      •Ensuring the collection of the service charge levy through the tTerminating
             cCarriers
      •
      •Identifyingication of suitable projects through which the Uuniversal Sservice
             Oobligation (USO) will be will be metadvanced
      •      .

4.2   The major Sstrategies for Aachieving these o Obbjectives were as
follows:

      •Issuede a Request for Proposal (RFP) for a nNation-Wide bBroadband
            (LAN-WAN) nNetwork
      •
      •Collaborated with the Jamaica Library Services and the National Library to
            increase and enhance their their capacity for providing greaterwider
            public access to the Internet
      •
      •Collaborate with the National Library to increase and enhance its capacity for
            providing wider public access to the Internet
      •
      •     Collaborated with the Postal Corporation of Jamaica to increase and
            enhance its capacity tofor affordproviding wider public access to the
            Internet


5.0   Physical Aachievements for Financial Year 2006/2007




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      •Evaluated Adjudication of rresponses to the bBroadband RFP and
             commenced negotiations with selected providers
      •
      •      Collect levy payments as detailed in the financial report
      •      Approved project plans for the Jamaica Library Services and the
             National Library for upgrading their facilities
      •      Developed project plans in collaboration with the Postal Corporation of
             Jamaica to provide broadband facilities in pilot post offices
      •      Advanced mobilization payments to the e-Learning company in respect
             of contracts for furniture and multi-media equipment for high schools
      •      Effected monthly payments to the e-Learning Company to cover its
             administrative expenses
      •      Collaborated in providing strong defence against foreign agencies that
             mounted challenges against the levy regime.
      •
      •Invested moniesfunds with approved institutions in accordance with the
             Fund’s our tTreasury mManagement policy
      •
      •      Completed our draft aAccounting pPolicies and pProcedures, and our
             oOperating pPolicies and pProcedures
      •      Completed our draft hHuman rResource mManual
      •      Collected levy payments as detailed in the financial report presented in
             section 7 below.
      •
      •
      •Advanced mobilization payments to the e-Learning company in respect of
             contracts for furniture and multi-media equipment for high schools.
      •
      •Approved project plans for the Jamaica Library Services and the National
             Library for upgrading their facilities.
      •
      •Develop project plans in collaboration with the Postal Corporation of Jamaica
             to provide broadband facilities in pilot post offices.
      •
      •Made monthly payments to the e-Learning company to cover their
             administrative expenses.
      •
      •Collaborated in providing strong defence against foreign agencies that
             mounted challenges against the levy regime.


6.0   Human Resources

6.1   Administration/Staffing



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       At the end of the year, there were five (5) members of staff, with two unfilled
       vacancies.

6.2    Training and Development

       The Director of Projects attended a four (4) days Project Management
       Seminar offered by the University of New Orleans/PMI.


67.0   Financial Performance for Financial Year 2006/2007


       For the Financial year 2006/2007, the UAF Universal Access Fund Company
Limited (UAFCL) estestablished a revenue target of $1.392 Billion comprising:

       •     Access Fees                 $1.380
       •     Interest Income             $ 0 .012
                 Total                         $1.392 Billion




7.1    Allocation of Revenue
       •     e-Learning and OOther PProjects - 95% of AAccess FFees $1.311
       •     UAFCL 5% of AAccess FFees + Interest Income              $0 .081
                                                               $1.392 Billion

7.2    For the Financial year 2006/2007, revenue surpassed target by approximately
       19.6% as shown in the table below:

        Revenue                                     Actual $                Budget $
        Access Fee                                    1.538                   $1.380
        Interest Income                               0.126                    0.012
        Other Income                                  0.001                        -
        Total                                         2.665                    1.392

7.3    Access Fees


       During the review year, the UAF faced some UAFCL faced many challenges
pertaining to the collection of the Universal Service Levy. These were::




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      •      There has been Ddisconnection of three (3) interconnected carriers
             whichas they defaulted in their levy payments as required by the
             Ministerial Order and supporting Annex.

      •      Late payment of fees from time to time.

      •      Reduction Diminution of levy receivables due to – Voice overOver
             Internet Protocol (VoIP) and other bypass techniques that have
             resulted in a reduction of billable traffic minutes.

7.4Interest Income
7.4

Interest Income earned surpassed target due to appreciable because of the
tremendous growth     in investments and deferrals in anticipated payments
consequent on delays experienced with some of the major projects. delays in
projected payments due to delays in our major projects.

7.5   Other Income


      The sale of the Requests for Proposal (RFP’s) for the Nation-Wide
Broadband LAN/WAN network realised an income of $715,382.00.

7.6   Collection


       Since the inception of The Fund on June 1, 2005, June 1, the company has
collected $2.556 Billion. There is is still approximately $300 Million in receivables
due for the year 2006/2007.

               Financial Year            Actual Collection $B
               2005/2006                 $1.298
               2006/2007                 $1.258
               Total                     $2.556

7.7   Investments


         Consistent with its treasury m,anagemntmanagement policy, tThe Fund has
invested in sSales and rRepurchase aAgreements within reputable financial
institutions, consistent with our Treasury Management policy. At the end of the
2006/2007 review period, 2007 March, total cCash at bBank and cCash on hHand
stood at $2.403 Billion as shown in the list below.:

          Accounts                                          Amount          Currency



                                   Page 5 of 8
          BNS Current A/c                                                               738,533             JA$
          BNS Savings                                                                14,306,740             US$
          Cap & Credit Securities                                                   161,823,464             JA$
          Cap & Credit Securities                                                   532,102,329             US$
          NCB Capital Markets                                                        95,461,683             US$
          RBTT Securities Limited                                                   168,058,381             US$
          Pan Caribbean                                                             284,853,383             US$
          Pan Caribbean                                                             153,550,609             JA$
          Dehring, Bunting & Golding                                                299,141,701             US$
          Dehring, Bunting & Golding                                                163,028,071             JA$
          Guardian Asset Mgmt                                                       328,706,727             US$
          Guardian Asset Mgmt                                                       138,400,788             JA$
          Petty cash                                                                     10,000             JA$
          Cash on Hand                                                             * 62,965,827             JA$
          Total                                                                   2,403,148,336             JA$


           * Cash on hand represents an amount which was received after banking hours on the last working day of the
                                                          month.


7.8   Expenditure


      TotalThe total expenditure (minus depreciation) for the Ffinancial Yyear
2006/2007 amounted to $109.89 Million. Of this amount The Fund accounted for
$39.61 Million directly and e-Learning Jamaica Company Limited accounted for
$70.28 Million.

Internal operating expenditure of $39.61 Million representeds 74% of the budgeted
amount of $53.22 Million.

 This was due to unUnderutilization of certain items of expenditure items as
follows:accounted for this situation:-

      •       Advertising and pPromotion
      •       Salaries and rRelated cCosts
      •       Meetings – lLocal and oOverseas




                                              Page 6 of 8
8.0    Focus for 2007/2008 Financial Year


8.1     Consistent with its mandate, tThe Fund will concentrate on completing all
approved projects to ensure wider availability of broadband access across the
country. consistent with its mandate. It is anticipated that the wide-area network will
be implemented to allow connectivity to the upgraded high schools and the public
libraries. It is also expected that the infrastructural upgrade of the National Library,
the Jamaica Library Services and the Postal Corporation will be completed by the
third quarter of 2007/2008fiscal quarter. The UAF We wwill continue to press for
better and more timelytimelier international traffic data from the terminating carriers
and the Office of Utilities Regulation (OUR), so as to facilitate itsour reconciliation
efforts.

8.2    The Fund We will enter into a contract for the provision of internal audit
services during quarter 1, and will conclude negotiations for public relations services
during quarter 2. The financial audits of our acaccounts for Financial Year
2005/2006 will be approved by the bBoard of dDirectors to facilitate the holding of
theour first annual general meeting, with the second one to follow shortly thereafter.




8.3    There will be emphasis Our Director of projects will be heavily engaged inon
monitoring progress at the more than one hundred and seventy (170) colleges and
high schools which will be upgraded under the e-Learning Projectprogramme. Post-
mobilization disbursements will be strictly on the basis of work that has been
cconfirmed to have been accomplished.

8.4    It is anticipated there will continue There is little doubt that there will continue
       to be challenges to the regime under which the levy is governed. It will be
       incumbent on the UAF We will therefore have to stay fully informed on all
       relevant issues so as to garner all requisite information to ccontinue providing
       to explanations for in the basis of the regime and to be better able to advance
       provide cogent arguments in its defence. IS THIS TOO DEFENSIVE? CAN
       WE DO WITHOUT IT?




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              ___________________________
                      Phillip Paulwell
                          Minister
Ministry of Industry, Technology, Energy and Commerce
                 May 30, 20072007 May 20




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