REPORT #449 November 2001

Produced by the Belize Development Trust

Just some rambling thoughts!

Peter has put a lot of engineering data on the listserve about the Chalillo Dam subject. I myself prefer to rely on the barometer indicator developed during the last UDP term in office. This was the Fonseca Barometer, named after a previous politician member of the PUP party who made a real mess up, on the contractual wheeling dealing representing the nation of Belize on the Mollejon Dam deal. Since then, it has cost Belizeans of several generations, several hundreds of millions of dollars and continues to do so. The way this UDP era barometer worked and it is still functional eight years later, is that to cut through all the spurious and conflicting arguments, you simply ASK Ralph Fonseca, if he is FOR, or AGAINST anything to do with a government contract and negotiation.

It works like this, if Fonseca is against the Chalillo Dam, then every right minded common sense person, should be for it. If Fonseca is for the Chalillo Dam, then the barometer says every right minded common sense people should be against it. Anybody know Ralph Fonseca's current thinking and opinion on the Chalillo Dam?

I don't have much trouble with leasing the valley and dam site to Fortis for thirty years. But like all Concessions, whether you are making toilet paper, shrimp farms, hotels or what have you. This basically should be the end of the story, if the PUP are for the Chalillo Dam on behalf of the Government. That said, it is quite true that we need as much diversification in electrical production feeding the national grid as possible. Chalillo would give us a bit more and I have no problem with that. However, the confusing aspects are all these extras they are talking about giving FORTIS and their subsidiaries in Belize. I don't buy that, can't see it at all! This is after all, just another investment in Belize and if they get the valley on a thirty year lease that is all they should get. They then make the decision to build, or not to build, to invest, or not invest. If they don't somebody else will come along and do so. Such money could be raised in Taiwan, or Hong Kong, real fast. In fact, I would take away some of the benefits Fortis currently enjoy under the Fonseca Mollejon Dam deal. Any production from Chalillo, if Fortis should build it, at their own expense and risk capital, should see that this 7.5 megawatts of electricity is bought with Belizean Currency. No existing or new guarantees of foreign exchange rights. They enter the foreign exchange arena in competition with everybody else who is investing in Belize. The next thing, the same amount of water that Chalillo Dam uses to make 7.5 megawatts of electricity, will then go downstream to Mollejon Dam and make another 7.5 megawatts. So, in total, there is going to have to be a formula whereby production from the original Mollejon Dam average annual statistical production figures is separated from this new 15 megawatts to be produced from Chalillo Dam. The Cascade Effect as it were. Next I think the negotiators and Gawd help us, I hope it is not Musa and Fonseca, but some Chinese and Arab Merchant negotiating team working on behalf of government. The negotiators have to make sure that the contract stipulates no more than 15 % profit over the cost of production of this electricity, or whatever the same rate can be expected in Eastern Canada from Fortis hydro dam projects. Let the Canadian Government do the calculating for us. This then would be sold at cost + 15% to the customer in Belizean currency.

Electricity in Belize is a PRIVATE MONOPOLY. It should not be that! Due to Fortis owning majority shares in all the pyramid architecture of production, distribution and sales through various companies and PLUS the fact they are protected by LAWS, so that no independent investments can co-generate electricity and sell it to the NATIONAL GRID conrolled by FORTIS shares. Then it behooves the Legislature and Senate to amend the existing legislation and let independent electrical producers sell electricity to the National Grid. Nor should FORTIS through it's monopoly controls be permitted to stipulate the terms and prices and other conditions. These should be taken from the international arena and applied to the legislation in Belize. Open up the electricity market and you will see big changes in the amount of producers of commercial electricity in Belize. Right now, electricity is a MONOPOLY and a closed SHOP. It is time to change that equation. FORTIS are doing well and will continue to do well. It is the nature of competition, that competition will probably end up serving back o'bush places that need electricity and where FORTIS for the time being do not wish to invest. This is development!

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