THE REPORTER Sunday, September 10,2000
By D.T. Habet
Does Fonseca have the Midas Touch?
From 1989 to 1993 Ralph Fonseca, the Minister of State in the Ministry of Finance seemed to have usurped power from George Price, the then Prime Minister and Minister of Finance.
It was Fonseca's signature that appeared (some say illegally, since only the Minister of Finance has authority to sign on Belize's behalf) on Belize's first and still only billion dollar contract.
The now infamous "hydrodam" was supposed to lower our electricity rates significantly, according to Fonseca and the PUP government. The promise of lower electricity rates was never fulfilled. Later it became known that BEL's management and engineers were "kept in the dark" about everything concerning the dam project, including the most detrimental "take or pay clause", which would force BEL to pay $25 million yearly for 40 years whether BEL received $5 or $15 million worth of power annually from the owners of the dam.
As I write we have learned that BEL, now owned by a foreign company, refuses to pay the dam owners for power that it does not receive.
Another matter that makes me question Fonseca's financial acumen, if not his morality or lack of it, is the sale of Social Security's BTL shares to Ashcroft and the manner in which Government's remaining BTL shares were sold. Why would a government rid itself of Social Security's best earning and most secure investment? Why would a government sell shares that were paying a 15% dividend year after year for the same $2.00 it had sold it for a few years earlier?
This is what Fonseca did with the Social Security shares and with the balance of BTL shares still owned by government.
The BTL shares were definitely worth more than $2.00 and a few of the original investors considered their shares worth at least $3. This has now been proven to be true as BTL now pays 24% dividend annually.
Imagine if Social Security Board had been allowed to own 65 percent of BTL shares. Government would have no need to raise Social Security contributions or to introduce National Health Insurance.
The Belizean public would be happy to keep BTL a monopoly forever and to keep paying exorbitant monthly phone bills because the profits would be staying in the country and benefit all Belizeans. As it is right now (and always will be), millions upon millions of dollars of BTL profits are converted to US currency and taken abroad.
There's one thing that Fonseca could do that I would appreciate. Sell Social Security's $4.68 million stake in BECOL, a great investment according to the PUP government, for the same $4.68 million that Social Security originally invested in BECOL.
Why sell it for the same price it was purchased for almost 10 years ago?
Because BECOL has not paid any dividends to the Social Security Board yet. Not un centavo!
Social Security has lost at least $4 million in interest it would have earned over the last 10 years. ($4.6 million x 5 percent bank interest x 9 years = $4M).
If Fonseca could accomplish this feat, I would happily join his many PUP supporters who call him a financial wizard.
Any buyers interested?