REPORT #630 March 2003
SCREWY DEAL IN BELIZE? MAKE UP YOUR OWN MIND! TWO POLITICIANS, THICK AS PEAS IN A POD WITH A CANADIAN POWER COMPANY SEEM FROM THESE AGREEMENTS, TO BE GOING TO SCREW OVER THE BELIZEAN TAXPAYER ELECTORATE FOR WHAT REASON?

None of the explained rational reasoning seem logical or bear up under study!

THE ONLY NICHE ENVIRONMENTAL NESTING/BREEDING/FEEDING SITE OF 150 REMAINING SCARLET MACAW BIRDS IN THE WILDS OF BELIZE ARE TO BE DESTROYED AND MADE EXTINCT IN BELIZE BY POLITICAL DECREE with a new dam.

CHALILLO DAM IS A BAD DEAL - THE MACAL RIVER IS OURS!


by WeBAD, Cayo District, Belize, Central America

Fortis Inc. is a Canadian corporation who wants to damage our environment, our rivers and our wallets to make themselves richer

THE BACKGROUND

Fortis Inc of Newfoundland Canada is the majority owner of Belize's national utility, the energy distribution company, Belize Electricity Limited (BEL), and also the private hydro company, Belize Electric Company (BECOL). BECOL operates the existing hydro facility on the Macal River, the Mollejon dam, and plans to build a second dam, known as Chalillo. (and possibly a third at Vaca).

Between Fortis-BEL and Fortis-BECOL, Fortis companies generate 48% of the electricity sold in Belize, with the rest coming from a connection to the power grid in Mexico.

Because of this monopoly control, Fortis charges us the highest prices for electricity in all of Central America, and much higher than prices charged by Fortis companies in Canada.

WE PAY MORE - FORTIS MAKES MORE

Fortis-BEL & Fortis-BECOL had record earnings for the year 2001. Profits from Belize, were FOUR times higher than profits from its holdings in Canada. For the quarter ending September 30, 2002, Fortis, Inc. reported profits of US $18 million- 1/3 of that coming from Belizean pockets! This information from their own reports.

THE NEW DAM WILL INCREASE COSTS

Fortis-BECOL's plan to build the Chalillo dam, upstream from the existing Mollejon dam would allow Fortis-BECOL to more than double its earnings, and places all the risk on the people of Belize. The price of electricity from the new project will be higher than the price from the existing dam.

BECOL is proposing to construct and operate the Chalillo dam mostly to store water for the existing Mollejon plant, which has never produced the electricity promised. The dam's planned location is about 12 miles up-stream from the Mollejon and about 7 miles down stream from where the Macal and Raspaculo Rivers meet. The dam (reservoir) will rise (if it ever does fill up) 150 feet (about 3 times the height of the Hawkesworth Bridge). It will put about 2,355 acres under water, extending about 12 miles up the Macal River and just over 6 miles up the Raspaculo River.

THE THIRD MASTER AGREEMENT*

This plan to build the Chalillo dam involves a contract called the "Third Master Agreement". It will more than double payments to Fortis-BECOL from US$274 million to US$548 million over more than 50 years. On 21 November 2001, the Third Master Agreement, that includes the franchise agreement and power purchase agreement, was signed by:

  • The Government of Belize (represented by Said Musa, Prime Minister, Minister of Finance & Foreign Affairs) and Ralph Fonseca, Minister of Budget Management, Investment & Public Utilities;
  • The Utility - Belize Electric Company (BEL) which is 68% owned by Fortis.
  • The Producer - Belize Electric (BECOL) for the Mollejon Project and the proposed Chalillo Dam (referred to as the New Project) which is 95% owned by Fortis.
UNDER THE THIRD MASTER AGREEMENT* BELIZEANS TAKE ALL THE RISKS & PAY
  • NO LIABILITY. If something happens to the dam or river and people or property suffer damages, the GOB says we can't sue Fortis-BECOL for their mess up. "In no event shall the Producer [BECOL] be liable, whether in contract tort, negligence, strict liability or otherwise for any indirect, incidental or consequential damages of any nature arising at any time or from any cause whatsoever." (Power Purchase Agreement, Sec.17.2, p.17)
  • THEY CAN WALK AWAY, GO BACK TO CANADA. If the Project is destroyed or damaged by a natural catastrophe, even if that catastrophe could have been prevented by better planning, Fortis can walk away from the Project after getting the insurance proceeds. (Power Purchase Agreement, Sec.11.2 , p.13)
  • GUARANTEES YEARLY RATE INCREASE OF 1%. The price per kilowatt (Kwh) will increase by 1 % on 1 April each year beginning 1 April 2001 through to 31 March 2036. (Amended and Restated Power Purchase Agreement Sec.3.1(c), p.6)
  • THEY PAY NO TAXES. Fortis-BECOL pays no taxes or import/export duties to Belize, except payroll taxes, under a special law written just for them, allowing it to operate tax and duty-free. (Franchise Agreement, Sec.12.1, p.29)
  • WE PAY ANYWAY. If the dam does not perform as expected (because there is not enough water or for any other reason) and the estimates of power production are less or more than projected, Fortis-BEL and Fortis-BECOL can re-negotiate the contracts to charge consumers more. (Power Purchase Agreement Sec.3.2, p.8)
  • FORGET THE LAWS. The GOB promises to take care of any laws that might affect the project - "no governmental, private or other entity, other than the Government, has any rights, powers, or privileges that if exercised could adversely affect the granting of the Franchise, the terms and conditions set forth in the Power Purchase Agreement, including.the.rights and privileges the Government has agreed to provide to the Producer." But if there are any problems, the GOB promises to "take or cause to be taken such legislative and administrative action.necessary to convey to the Producer all rights and interests." (Franchise Agreement, Sec.3.2, 3.3, pp 24-5)
  • FORGET THE ENVIRONMENTAL LAWS TOO. The Government is saying this private company is free from citizen enforcement of laws -- except those laws with which the company has agreed to follow. "The Government covenants and agrees to waive, or cause to be waived, and indemnify the Producer against any private action under or with respect to, any and all environmental laws, rules or regulations now existing, or created hereafter, to which the Mollejon Project and the New Project may be subject. ." (Franchise Agreement Sec.7, p.27)
  • BELIZEANS WILL PAY AND PAY. . Belizean consumers are forced to pay twice for transmission lines built to the existing dam. Belizean consumers were already paying for these transmission lines as part of their current rates. The new contract makes BEL purchase this asset again, at a cost of $15 million, which will be passed on to consumers again. GOB promises to build roads to the new project site at government expense. (Franchise Agreement Sec.5.3, p.26)
  • THE MACAL RIVER IS THEIRS ??. The GOB promises to take care of all necessary matters to give control of the river and all tributaries to BECOL-Fortis. (Franchise Agreement Sec.3.3, p.25)
New archaeological ruins have been found in the area to be flooded. Whatever is below the level of the dam will be lost forever. Most of these sites are newly discovered and have not been properly documented, or explored.

*Third Master Agreement is made up of a Power Purchase Agreement, Franchise Agreement and an Amended and Restate Power Purchase Agreement

Prepared by WeBAD, Cayo, Belize

Stay tuned for info regarding a rally May 2 - Rally for the Macal River, with music banners, info, speeches, food, teeshirts. Hope to do amateur canoe race too.

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