AmbergrisCaye.com Home Forums About Belize Nation GOVERNMENT TAKES FIRST STEP TO RENATIONALIZE BEL

does anyone know of any other country who stands to have the entire country go dark because they cannot pay their electric bill?
very sad

Not to worry. You have a broke government taking over a supposedly broke BEL. And, we know how efficient the government is at running things.

Not so simple and would take hours to thru it, but assume Barrow always intended to nationalize BTL, BEL and BWS (Belize Water Service) which were all govtment owned, BEL was called BEB. so perhaps BEL and Becols #'s are just poison pills? Rememeber, BEL delivers power. Becol sells hydro power to BEL. Both BEL and Becol are owned by Fortis. BEL also buys from MX and supposed to buy from Belcogen, now running at 50% of what its projected to sell, Bowen's generator in Placencia is not operating. Hydro Maya is. Prolonged draught this year affected outpout from Chalillo dam. Its a mess. Not sure what PUC is doing, but assume its being directed by GOB and did not abide by the findings of the agreed upon arbitrator for this dispute. Should have looked into the CA geo thermal grid when debating Chalillo.

BELIZE rumor mill says NATIONALIZATION of BEL from FORTIS of CANADA imminent.

BEL THE ELECTRICAL UTILITY NATIONAL GRID DISTRIBUTION COMPANY IS STRONGLY RUMORED THIS WEEKEND, TO BE NATIONALIZED ON MONDAY THIS COMING WEEK.

According to local FORTIS OF CANADA CEO IN BELIZE, SPEAKING FOR STANLEY, OWNER OF FORTIS IN CANADA, the trouble has arisen because of debt financing of working operations of the company. Banks will no longer lend money to BEL and the companies shares now are valued less than zero. It was of course the responsibility of the parent company FORTIS to GUARANTEE loans made to BEL for operating purposes.

The problem arose because of the management style of FORTIS. Which originally was to do everything by loans and FORTIS got into trouble with the auditors of the PUC, or Public Utility Company in Belize when the government changed hands. FORTIS had been lending money to itself through OFFSHORE SHELL COMPANIES the news media had reported, to run the company operations when needed, and earning interest on it´s own loans. The dividends and lack of investment and the padding with interest payments for FORTIS profits, has led to this disagreement with the current government of Belize. Fortis is DEMANDING that a $36 million debt of their National Grid Distribution company here in Belize, call BEL be dropped. According to lengthy media interviews on local television by the Prime Minister, this was identified as a $36 million debt from creative and imaginative bookkeeping during the previous PUP administration when the transmission lines expansion, were charged to the company BEL earnings TWICE. Plus they want a BLANK CHEQUE and to sidestep the PUC, while also raising customer electrical rates.

Needless to say the demand to drop the double bookkeeping charge of $36 million and demand to raise utility rates which has been mentioned on the TV, news are the main reasons for the debate. The Prime Minister has said, his friendly hand is held out to FORTIS of CANADA, for an amicable solution, but has been ignored. FORTIS of Canada are saying TAKE IT, or LEAVE IT!

According to local speculation on the TV News, it is going to be TAKE IT, in an unfriendly NATIONALIZATION, as FORTIS of CANADA are continuing to refuse to guarantee their bank loan operating system for BEL, in order to get the money. The Government of Belize has been financing operations of BEL for weeks now in the millions of dollars, while the refusal by FORTIS to operate their LOAN BORROWING system, by someone other than themselves, ( conflict of interest ) has led to massive debt pile up and a collapse of the electrical supply monopoly within Belize. Time is running out and the government has no choice. You cannot continue to lend millions to someone elses ´national utility monopoly company and let them run a profitable company into bankruptcy while playing ROBBER BARON hardball. Destroying the economy of Belize at the same time. FORTIS of CANADA has more money than the Government of Belize and is bigger than the local government by thousands of percent. FORTIS leaves little leeway for any sort of amicable solution. Local consumption is only 9 mgwatt and expected to grow to 25 mgwatt over the next 20 years.

If and when BEL is nationalized, then the operating system for what is a profitable utility has to gradually be changed from a loan borrowing system to a CASH RESERVES system. It will take at least 5 to 15 years to turn the company BEL around. If one is to set aside $5 million a year for example, in an operating and emergency set of cash reserves. One where you pay cash on the barrel as you go along. For a profitable company this should be no problem.

One of the better management skills FORTIS had, was the ability to pull in LINESMEN from all over the Caribbean where FORTIS had other electric supply companies, after a HURRICANE EMERGENCY DESTROYED THE TRANSMISSION GRID IN VARIOUS PLACES. Downtime as things got repaired and up and running was a management asset we and other countries enjoyed from FORTIS. In replacement. it now behooves our NEMO ( emergency management organization ) the skill to form knew leadership in forming bonding arrangements mutually beneficial throughout the Caribbean countries, particularly CARICOM countries and set up a NEMO system each year, to fly in linesmen to countries that are hit by HURRICANES and need a BIG FAST PUSH to rewire and re-pole the destroyed segments of local distribution grids.

After NATIONALIZATION, I think I will see if I can take a look at that old used junk turbine generator held for emergencies, which BEL cannot afford to run and see what the technical specifications on it are. Have thoughts about purchasing it, instead of importing one more suitable, and designed for the purpose, to supply electricity to the NATIONAL GRID as a profit making company. Will take some steam boiler system conversion, but we do think we can use it, or one like it, pre-engineered and imported and set up. Just be faster and cheaper, to use something already here, even if it will only run in FULL PRODUCTION for a 3 year life cycle. Give time to learn some lessons and acquire more better designed units if successful.

Posted by Western Belize Happenings!
http://westernbelizehappenings.blogspot.com

Special Sitting Of the House for Monday; Will GOB Takeover BEL?

"Special Sitting Of The House Of Representatives" - whenever you hear those words, it means government has a piece of legislation it needs to push through in a hurry.

That is confirmed in a notice that went out this afternoon. It states that the special sitting will be on Monday 20th. June at 10:00 which will be followed by a special sitting of the senate at 3:00 pm.

The Prime Minister would not comment, but there can hardly be a doubt that the government intends to pass legislation to take over BEL. We say that because the exact same format was used in August of 2009 when government took over BTL. What will be the terms of the take-over, and the time frame, and who will be the players? Well, all those questions are up in the air tonight but should be answered with some finality on Monday morning at the House OF Representatives. It's a not an altogether unexpected turn from the tack government was taking last week when it asked Fortis - which is BEL's parent company - if it was interested in selling.

Since then, the Prime Minister says it has become apparent to him that BEL does not want to negotiate - but has adopted a take it or leave it position. And now, it seems government will pass legislation to take it, over. Again, there is no official confirmation but that's what it looks like. We'll be there on Monday to see what develops.

Channel 7

Prime Minister Barrow's speech to House on Introduction of Bill to provide for assumption of control over electricity supply by GOB in the public interest.
//Ambergriscaye.com/art/pdfs/SpeechtoHouseonIntroductionofBill.pdf

GOVERNMENT TAKES OVER REINS AT BELIZE ELECTRICITY LIMITED

Patrick Jones reporting
With the opposition benches unoccupied and Orange Walk East representative
Marcel Cardona quietly taking his seat in the far corner of the opposition
side of the floor, the House of Representatives convened for the special
sitting. 

Prime Minister Dean Barrow
"Mr Speaker, I rise to introduce a Bill for an Act to amend the Electricity
Act, Chapter 221 of the Laws of Belize, Revised Edition 2000-2003, to
provide for assumption of control over electricity supply by the Government
in the public interest."

While the order papers indicated only three bills which had gone through
the committee stages that were up for second and third readings, at the
heart of today's sitting was the re-nationalization of Belize Electricity
Limited.

Prime Minister Dean Barrow
"This is the only way to assure the uninterrupted supply of all-important
electricity to our country, this is the only way pay BEL's bills, and the
only way to avoid a sugar collapse and a general collapse."

In lay man's terms, taking over BEL is the only way to save the country
from being plunged into blackout.  The plan is for the Barrow
administration to assume full control of Belize Electricity Limited on
Tuesday, as the bill to amend the Electricity Act was pushed through
parliament today.  Minister of Public Utilities Melvin Hulse is
expected to sign the order for the expropriation of BEL on Tuesday. 

Prime Minister Dean Barrow

"This has only to do with the supervening circumstance of this immediate
need to avert an electricity cut off in Belize. Again, Mr Speaker, today
has nothing to do with philosophy or ideology. Even though the chief Fortis
personality Mr Stan Marshall has publicly displayed his contempt for
Belizeans, it also has nothing to do with payback. Indeed, BECOL is also
owned by Fortis and is extremely valuable and profitable to Fortis. Just
how valuable can be gleaned from a perusal of the minority judgment in the
Privy Council BACONGO case. There was clear consternation among the law
Lords at the one-sidedness of some of the provisions of the agreement for
Fortis's dam construction(no pun intended). But, precisely because BECOL is
functioning well and there is no difficulty in its generation of
electricity, there can be no reason to interfere with BECOL and Fortis's
ownership. In other words, Mr Speaker, except for compelling, unavoidable
public interest reasons, this Government observes the sanctity of
contracts."

In laying out the case for the re-nationalization Prime Minister Barrow
told the House that the acquisition of BEL is in the public interest
because the company simply cannot pay its debts.

Prime Minister Dean Barrow
"The current inability of BEL to pay for the electricity which it is to
transmit to the public, has been a developing story for some time now. But
things started coming to a head when an SOS was called in to me at the end
of April by Mr Lynn Young, the CEO of BEL."

The Prime Minister said his Government has been assisting as much as was
possible by pre-paying its monthly electricity Bill to the tune of two
million dollars per month, up to September of this year. But he says the
lifeline under the current ownership is at an end, hence the reason for the
government take over.

Prime Minister Dean Barrow
"And so government is acting today by way of this Bill. There is simply no
alternative and for all the reasons I have recited we must now urgently
take over BEL in the public interest. This Bill is meant for now. It is not
to provide for what may occur in the future, necessitating action then. It
is to deal with what has already overtaken us, necessitating action
presently. And that is because a situation has been reached with the Belize
Electricity Limited, the sole supplier of electricity to the public in this
country, which makes clear that BEL is currently unable to pay for the
power that it must purchase in order to transmit electricity to the nation.
Thus this Bill. And in order to commend its passage to the House and the
nation, let me now rehearse for the record the facts that precipitated our
action."

The Prime Minister made an extended presentation of what he described as
the facts of the BEL crisis, including correspondences back and forth
between the company's CEO and government.  BEL has been unable to meet
its payment for electricity it buys from Comision Federal del Electricidad
of Mexico, BECOL, which is also owned by Fortis Inc of Canada and
BELCOGEN.  Prime Minister Barrow says that when BEL first raised the
specter of financial difficulties at the end of April, Government's
intervention came in the form of pre-paying its monthly electricity Bill to
the tune of two million dollars per month, up to September. But, Mr. Barrow
says the lifeline under the current ownership has come to an end. 

Prime Minister Dean Barrow
"I understood Mr Young to be saying that it was always Government's
intention to take over BEL, and that we have been acting and conspiring all
along to produce today's result. Accordingly, the PUC was ever intent on
frustrating and bankrupting BEL, and in this enterprise it was Government's
tool. Apart from simply being untrue, and an insult to the very bright,
very professional, very independent-minded people at the PUC, there are
several things wrong with this case according to Fortis and Mr Young. By
BEL's own admission, it is de facto insolvent. One has only to look at the
last annual report to recognize the extent of the long-term liabilities.
And there now are these huge current bills for power that must be paid. No
government in its right mind, and this is a government very much in its
right mind, would want to take this on. Again, Mr Young knows that I and
the Cabinet strove to forge a way forward out of the impasse between BEL
and the PUC. We had both sides make presentations and we then offered
suggestions as to a resolution."

Mr. Barrow says that what his government could not do was instruct the
Public Utilities Commission to in effect, buckle to the wishes of Fortis
Incorporated.  And when government takes over on Tuesday, the Prime
Minister says the hundreds of employees of the company need not worry about
their jobs as government has no intentions to interfere with the employment
of anyone who voluntarily chooses to stay with BEL.

Prime Minister Dean Barrow
"No one at BEL need fear for their job. I have spoken to officials of the
BEL workers union, which fully supports Government in its move, and
communicated this to them. It is the same thing with management. Mr Young
has already indicated that he will not stay, and there are suggestions that
other members of Executive Management might also wish to go. We have our
plans in place for that eventuality. But nobody will be forced out and
managers are free to stay. It is only the Fortis shares that we plan to
acquire, so there will be new members appointed to the Board to replace the
Fortis Directors. But the SSB Directors and the Chairman, appointed long
ago by GOB under the golden share, will naturally remain. So will the one
other Director also appointed by GOB under the golden share. An interim CEO
will be installed immediately to replace Mr Young, and he will be supported
by an executive committee of the Board. We expect as smooth a transition as
possible."

And just like that exit Fortis Incorporated, enter government.  The
Prime Minister says he has gotten assurances from union representatives
that the workers of BEL are confident that they can make the company
successful under the new ownership. 

Prime Minister Dean Barrow
"All the skeptics, the Chicken Littles that decry a GOB takeover on the
ground that it will lessen efficiency need to screw their courage to the
sticking place. "This time no stand like before time". The bad old days of
political interference in statutory bodies or Government-owned companies,
are gone forever. This administration will not countenance that and in any
case the citizenry won't stand for it. Neither BWSL nor Telemedia is run
along such lines, and that is the proof right there."

Story at http://www.lovefm.com/ndisplay.php?nid=14130

Government Takes Over BEL

Government has acquired Belize Electricity Limited. The law was signed by the Governor General this afternoon, and the order of acquisition was signed by the Utilities Minister and the Prime Minister this evening close to 5:00 pm. A gazette extraordinary will be printed tonight - and tomorrow the new interim CEO and a new Board of Directors are expected to go in and take over the company.

That's where things stand at this hour, but for the whole story we start this morning at the House of Representatives. The government convened a special sitting - with only three items on the agenda - the second reading of a number of anti crime measures. But - as expected - a supplementary agenda was introduced just before the meeting with one main item added: The Bill for an Act to amend the Electricity Act.

It's been in the making for some weeks, after it became clear that BEL was insolvent and in 27 million dollars debt to its suppliers: 10 million owed to CFE, 12 million to BECOL, and 5.1 million to BELCOGEN. With that debt - and BEL saying that it is unable to pay, government concluded that there is an imminent danger of the disruption of electricity supply to the public - so it moved in for nationalization of the power company - which had been privatized in 1993.

The Prime Minister outlined the entire case in a 40 minute address to parliament - and here are excerpts of that:..

PM Dean Barrow
"Mr. Speaker the main provisions of the bill allow the minister responsible for electricity to make an order with the approval of the Minister of Finance acquiring all such property as may be required to assume control over the supply of electricity in Belize and that is because a situation has been reached with the Belize Electricity Limited the sole supplier of electricity to the public in this country which makes clear that BEL is currently unable to pay for the power that it must purchase in order to transmit electricity to the nation. The current inability of BEL to pay for the electricity which it is to transmit to the public has been a developing story for some time now. But things started coming to a head when an SOS was call in to me at the end of April by Mr. Lynn Young the CEO of BEL and of May 4th as a follow up to that meeting Mr. Young wrote to me. It is worth Mr. Speaker quoting excerpts from that letter. This is important - the last excerpt from the letter Mr. Speaker. "Since the government is party to the agreements with CFE and BECOL as well as the loan agreements with CDB, IBRD and the EIB and thus exposed - we are seeking the government assistance in helping the company to manage its way through this very difficult period". That last part is extremely important - there are those who say 'you take over BEL, you have to pay the liabilities. Why are you assuming those liabilities?' what is made clear here is that we were going to assume them in any case because government is guarantor. The rest of the story to this point is well know Mr. Speaker. Mr. Young and I spoke on the phone before his trip that he took along with Senator Eamon Courtenay and FORTIS' Stan Marshall to go see the IMF and the World Bank in Washington on June 6th. Then we met on Friday of that week. None of what was suggested was acceptable to the government of Belize. How could they be? First of all; government was entirely unsure how BEL had got itself into its predicament in its first place and that's the question that everybody is asking? How does BEL get to where it says it is? So being unsure of what had really happen government could not simply continue to hand over tax payers' monies to a company over which it had no control.

I asked him to find out if Fortis would be willing to sell to GOB. And since the reply was couched in a take it or leave it manner, we wrote to Fortis's lawyer Eamon Courtenay saying we would leave it. Some may argue we should have made a counter-offer. But the peremptory nature of the Fortis response convinced us of the futility of that. After all, I had asked Mr Young to procure from Fortis a time and place for negotiations in the event Fortis was willing to sell. The fact that the Fortis answer deliberately omitted to do that, was a message that was hard to miss.

When we gave that 4 million dollars last Wednesday we thought it would buy us a couple of weeks. But it turned out that in addition to the just under 10 million owed to CFE for power, and the 12 million to BECOL, BEL also owed 5.1 million to BELCOGEN as of the BELCOGEN's May invoice. Still, BEL was giving none of the four million dollars that we gave them last Wednesday to BELCOGEN, I have the break down of how they were portioning that 4 million. The bulk of it were going to CFE, some was going to FORTIS and some was going the EIB. None was going to BELCOGEN. And that became a real tipping point. BELCOGEN needs money to service its own foreign debts, which are cross-referenced to the BSI sugar factory loans.

Without BEL as a buyer in good standing, BELCOGEN would ultimately also collapse. And because of the cross-default clauses, if the BELCOGEN loans are called the BSI loans are also called. It was therefore critical, in my view, that BELCOGEN should be able to assure its creditors that it will be able to collect for its electricity sales to BEL and the only way that can happen is if government is in charge and makes those payments. Otherwise, exit now the entire sugar industry and forget everything Government had already done last year by way of rescue.

The six thousand cane farmers and their families would never forgive us, the nation would never forgive us. It was in all these circumstances and the way things were ramifying that we decided there was no further time to spare. And so government is acting today by way of this Bill. There is simply no alternative and for all the reasons I have recited we must now urgently take over BEL in the public interest.

I will wrap up now by talking about how we will handle the transition. No one at BEL need fear for their job. I have spoken to officials of the BEL workers union, which fully supports Government in its move, and communicated this to them. It is the same thing with management. Mr Young has already indicated that he will not stay, and there are suggestions that other members of Executive Management might also wish to go. We have our plans in place for that eventuality. But nobody will be forced out and managers are free to stay if they wish.

The point I am making is that the government has every faith that we can make this work. All the skeptics - the Chicken Littles that decry a GOB takeover on the ground that it will lessen efficiency need to screw their courage to the sticking place."

The full address is available online - you can find a link to that at 7newsbelize.com or you can see it in its entirety after the newscast.

The House Sitting concluded at 12:30 - and the senate met at 3:00 pm to consider it. With the government majority - they also passed it. Of note is that Senator for the business sector Godwin Hulse voted against it saying that, quote, "This sends a very dangerous and frightening signal." He added that the problem is how it is being done - by acquisition rather than negotiated arrangement....and the private sector does not feel that all the options have been explored...

Channel 7

PM Says He Wants New CEO in ASAP

But despite Hulse's protestations - the bill was passed by the senate, carried by the government majority. So now that the law has been passed - what and who is next? That's what we asked the Prime Minister outside the House Meeting:…

Jules Vasquez
"Will Mr. Jeffrey Locke be the new CEO as has been reported?"

PM Dean Barrow
"I don't know that I want to confirm anything just at the moment. The Senate has to meet this afternoon and the GG has to sign the bill into law. He is as I understand it in Belize City today and there is some doubt as to whether he will be available after 4. If the Senate doesn't get through by 4 his signature will not be until tomorrow. It is not until he signs that the relevant orders can proceed to be made and so we'll be getting a little ahead of ourselves I think if we confirm any name in terms of what we have in mind for the CEO position."

Jules Vasquez
"How soon would you like the takeover to be effective?"

PM Dean Barrow
"If the orders can be sign tomorrow afternoon - as soon as the orders are sign. The Chairman of the Board who is Rodwell Williams and has been the chairman from the time of the change of government is standing by with the prospective interim CEO. I have to go tomorrow because the meeting with President Calderon has been confirm for Wednesday in Guatemala City and so I will be leaving because I really need to talk to the President about this whole issue and how CFE can help. The Deputy Prime Minister will then be acting Prime Minister. If we can get the orders made tomorrow afternoon, we would expect that the chairman of the board together with the acting Prime Minister and the interim CEO would immediately go into the company both from the point of view of effecting as quickly as possible the implementation of the takeover but also to reassure staff - to make it quite clear that as I said nobody is being force out, nobody is being ask to leave, nobody is being required to leave. We have heard that executive management which consists of about 4 persons or so, we know that FORTIS had made offers to them. They are likely to go but it is not as our prompting, it is not at our urging and so the idea of people going in as quickly as possible - the chairman of the board, the interim CEO and the acting Prime Minister is to reassure the people there and to try and indicate and confirm and effect as orderly and as smooth and as quick a transition as possible."

Jules Vasquez
"Compensation?"

PM Dean Barrow
"Compensation, again I am no expert but BTL would imagine the compensation there would have to be far more than in this case. BTL was and remains a profitable company - there is no question at all of that and so we will have to when we pay compensation - compensate on that basis. With BEL it's clearly a different story. Stan Marshall said he would sell for the book value. There is clearly a difference between book value and marker value and compensation is based on market value. Now market value takes into account not just the long term liabilities but the fact that currently operationally the company is pretty much in collapse. I don't know the assets clearly have some financial worth but if the company was employing the assets in a loss making venture and you can't sell the assets to anybody else because the assets are only good for the transmission of electricity. I would think that the end of the day the compensation would not be merely as much as some people especially in the private sector seem to fair."

Things have changed since that interview; as we noted at the top of the newscast, the Governor General did sign the bill into law this afternoon - and the order of acquisition was signed by Utilities Minister Elvin Penner and Finance Minister Dean Barrow just before 5:00 pm - so the law is in effect as of tonight.

The new members of the Board of Directors and the CEO will go in to the company tomorrow morning where Chairman Rodwell Williams is expected to have a brief meeting.

We note that there's a lot of catching up to do. That's because there's no at the wheel! 7news has confirmed that the company's CEO Lyn young voluntarily terminated his own contract on Friday and also terminated the four most senior managers who form the executive management team. They are Vice PR Vice President Engineering, Joseph Sooknandan, Vice President of Finance Rene Blanco, Vice President Customer Care, Curtis Eck and Company Secretary Juliet Estell.

Why fired? Well it seems there are greater benefits for those senior executives when they are terminated as opposed to resigning. Young told us this evening that when there is a change of ownership - the new owner should have a chance to get a clean start going forward, and also indicated that the senior managers are entitled to their severance. There appears to be some dispute in the eyes of government as to whether these terminations were made with full board knowledge and approval, and that is expected to be an issue going forward.

Whatever the case, there are a lot of empty posts to fill urgently and a leadership vacuum - as the senior managers left the car running with no one at the wheel. Former CEO Young today confirmed that he has not been there from Friday and will not be there when the new team arrives tomorrow - which the Prime Minister did not expect to be the case. He told us as much today:..

Young this evening told us that if it was an amicable transition of ownership he certainly would have stayed around. He said he is not the kind of guy to be all for one side and then just switch allegiances when that side is pushed out…..

Channel 7

Government nationalizes B.E.L.

Belize Electricity Limited will be in government hands by Tuesday morning. Today, the government rushed through the House and Senate, legislation to take over the utility company worth four hundred and forty four million dollars. The drastic measure of a corporate takeover became more than whispers on Friday evening when it was announced that there would be special sittings of the National Assembly. The modus operandi in the capital followed a pattern similar to the Telemedia takeover in 2009. In the House, Prime Minister Dean Barrow laid out his reasons why the cash strapped government took on a second major corporation, citing as the primary reason that the country would have been cast into long periods of blackouts because of BEL's litany of debts. B.E.L. owes millions of dollars to BECOL, Mexico's Commission De Federal De Electricidad, Belize Sugar Industries' Belize Cogeneration Facility (BELCOGEN), and the Caribbean Development Bank. Barrow said that the prepayment of government bills to buffer B.E.L.'s cash flow problem could not continue. He gave several reasons to appropriate the electric company including; B.E.L. is in grave financial difficulties and is unable to pay or service its debts and is otherwise unable to secure the continuity of electricity supply and notice to revoke license has been given by the P.U.C. Barrow also told the House he wanted to avert the disruption of electricity supply.

Dean Barrow

"The main provisions of the Bill allow the Minister responsible for electricity to make an order, with the approval of the Minister of Finance, acquiring all such property as may be required to assume control over the supply of electricity in Belize. This is to be done where circumstances have arisen such that it is necessary in the public interest for government to assume control over electricity supply in order to maintain the continuity of that supply to the country. In trying to keep up with CFE payments, we have been having difficulties in meeting some major obligations to other creditors including the Caribbean Development Bank (CDB) and BECOL. We currently owe BECOL in excess of ten million Belize dollars. Now that BELCOGEN is back on line, we are receiving power from them but will have problems meeting payments to BELCOGEN as well. We are also struggling to make a payment to the European Investment Bank (EIB) that is due at the end of this month. Since the Government is party to the agreements with CFE and BECOL, as well as the loan agreements with CDB, the IBRD and the EIB, and thus exposed, we are seeking the Government’s assistance in helping the company to manage its way through this very difficult period.

CFE has advised that we do not have-this was the twenty-fourth of May. I believe that was a Tuesday. CFE has advised that we do not have sufficient credit for power purchases to take us through this weekend and will interrupt supply of services on Friday if no arrangement is made for any payment or extension of credit. We need an urgent response in order to determine how and when we should start planning rotation power outages for the country as appropriate. So people have to understand that this is not something that was likely to happen. This was something that was about to happen. There are some who say, well why don't you wait. How can we wait when from as early as the twenty-fourth of May, we were told that the country would be plunged into blackouts by the Friday of next week; except government stepped in again to bail out B.E.L. When we gave that four million dollars last Wednesday, we thought it might buy us a couple of weeks. But it turned out that in addition to the just under ten million dollars owed to CFE for power, and the twelve million to BECOL, B.E.L. also owed five point one million Belize dollars to BELCOGEN as of BELCOGEN's May invoice. Still, B.E.L. was giving none of the four million dollars that we gave it last Wednesday to BELCOGEN. I have the breakdown of how they were apportioning that four million. The bulk of it was going to CFE, some was going to Fortis and some was going to the EIB-none was going to BELCOGEN. And that Mister Speaker became a real tipping point. BELCOGEN needs money to service its own foreign debts, which are cross-referenced to the BSI sugar factory loans. I knew that the BELCOGEN people were travelling to Washington for a meeting last Friday with the international bankers that are BELCOGEN’s financiers. The purpose of the meeting was to discuss the rescheduling of the BELCOGEN loans. Now Mister Speaker, BELCOGEN’s sole reason for being is to convert bagasse into energy for sale exclusively to B.E.L. Without B.E.L. as a buyer in good standing, BELCOGEN would ultimately also collapse. And because of the cross-default clauses, if the BELCOGEN loans are called the BSI loans are also called. It was therefore critical, in my view, that BELCOGEN should be able to assure its creditors that it will be able to collect for its electricity sales to B.E.L. and the only way that could happen is if government is in charge and make those payments. Otherwise, exit now the entire sugar industry."

Channel 5