Incredible news of the Belize Electricity Limited’s plunge and potential collapse has been in the news cycle and minds of Belizeans for a few weeks. The company has been relying on government for bailouts to meet its expenses. The Government of Belize paid millions of dollars in advances to BEL but it was almost pointless- trying to solve a drought by throwing cups of water in a dry well. It became obvious that eventually, and very soon, BEL’s suppliers would cut their supply and the country would have been plunged into darkness. It was that reality that prompted Prime Minister Barrow at a June 8th press conference to assure the public that “The Government is prepared to do whatever is necessary to assure a stable electricity supply to this country.”
At a Special and historic session of the House of Representatives on Monday, June 20th, Prime Minister Dean Barrow explained, “we would never have wanted to take over a BEL that is debt-overburdened and on the brink of operational collapse. But in one of those perfect ironies of life and politics, it is this very state of affairs that obliges us to take it over. And so we will.” He went on to introduce a bill that amends the Electricity Act to provide for the “assumption of control over electricity supply by the Government in the public interest”.
During his introduction of the bill, PM Barrow shed light on how grim the prognosis was for the Fortis run company. In terms of its obligations to its power suppliers alone, BEL owed approximately $27 million- $5.1 million to BELCOGEN, $10 million to Mexico’s state owned Commision Federal de Electricidad(CFE) and $12 million to Fortis’s BECOL. Combining those expenses with debt to banks, it would be fair to say that BEL was on life support. The agreed upon Letter of Credit between CFE and government is $10 million. Since that is exhausted, direct payment must be paid just to prevent CFE from cutting services. The $12 million owed to BECOL may be the least harmful debt because they have the same parent company. Though it is the smallest figure, the $5.1 million owed to BELCOGEN may be the most pressing issue. PM Barrow explained that BEL is the sole consumer of BELCOGEN’s power supply. IF BEL is unable to pay for power then BELCOGEN will surely collapse. Belcogen’s collapse would mean a default on its own loan obligations which are cross referenced to the Belize Sugar Industry loans. Therefore, if BELCOGEN fails the sugar industry fails and government’s heroic rescue would be short lived. To that idea, PM Barrow said, “The six thousand cane farmers and their families would never forgive us, the nation would never forgive us.” Those circumstances caused PM Barrow to present an affirmative response to Lyn Young’s bold ultimatum: “Government better solve it.” However, not in a way pleasing to Young and to whom he pledges allegiance.
The House of Representative passed the bill at 12:20 p.m. There was no participation from the Opposition who chose not to show up at the historic meeting. They chose not to participate in a process that saved the country from a manmade disaster- a manmade disaster which is fruit of the PUP’s philosophical commitment to privatize essential public assets. They should be grateful to the Government of Belize for saving this company which they handed over to their foreign investor. The Senate approved the bill without amendments just before 4 p.m. later that afternoon.
One question now remains. How much Fortis should be paid for its shares? $27 million owed to power suppliers, millions owed to local and international banks, millions owed to government and consumers of Belize, years of profit shading… Perhaps the question that should be asked is can they be charged if an audit of the company prove that the books were being cooked?
No longer shall BEL be raped!!! BEL is for Belize and Belizeans.
