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The sad story of another PUP privatized utility

During the wild era of PUP privatization, the Port of Belize City, which was sold under a secret arrangement between the PUP government and Luke Espat, and almost 10 years later, the Port still remains the most expensive in the region and one of the most inefficient. Under government ownership, the Port once served Belize and the entire Southern Mexico as a transshipment port. Since privatization, the Port has deteriorated to such a point that even our own Belizean importers and exporters are now regularly using neighbouring ports in Guatemala and Honduras to take advantage of lower costs and better service. The Port is yet another one of the utilities in Belize that is in serious danger of physical failure; an outcome that would have dire effects on the very pipeline of goods entering Belize and a virtual shutdown of Belizean exports, both with dire consequences to our economy.

Since privatization, the owners have done virtually no work on the upkeep of the port facilities. An inspection of the main pier itself shows massive deterioration of the concrete beams and pilings, with large chunks of concrete missing, and much of the rebar exposed and corroded. The pier is in such bad condition that there are portions that are closed off, and many foreign captains and local port pilots of international vessels are hesitant to even tie up alongside for fear of damage to the ships, or in adverse weather condition, that the ships’ weight may destroy the already shaky pier.

The deck of the pier itself is in the worse condition ever. There are complete sections missing or torn, making it very difficult to even drive on the pier without sustaining damage to truck tires.

At the time of privatization, the port was freshly dredged using government funds. Under a $40 Million dollar contract which created a water depth of some 28 feet. Today, the channel has silted up and most ships with drafts of over 18 feet find it very difficult to dock at the pier. Since the privatization, the Port has carried out no maintenance dredging, leading to very expensive damage to vessels that must navigate the shallow berth at the pier. Additionally, because parts of the pier head are unusable, the port is very limited as to the lengths of ships that can dock, again limiting Belize’s ability to compete with trade in the Region.
Shipping Agents and customs brokers complain bitterly on the condition of the equipment that service the pier. More often than not, the pier crane is inadequate for most of the cargo being moved, and often is inoperable and most of the equipment that ferry cargo from the pier to the container yard is often broken down, resulting to massive costs of operating cargo vessels which is eventually passed on to the consumer. Of the three container stackers that were included with the sale, only one is in operation at any given time, and the cargo shed is in dire need of repair. The rate of operation of vessels at the Port is worse than any other port in the region.

Despite the negligence in maintenance of the port, Port of Belize Limited persists in hiking up charges by interpreting every item in the port tariff in their favor. In a recent move, Belize Ports arbitrarily implemented a charge for export containers that resulted in an effective increase of some $250 per export container. The shipping agents, who threatened to suspend all vessel calls to Belize in protest, soundly rejected this attempt at gouging the export industries. To date, that situation remains unresolved. The situation is hardly better at the low berth dock, which services local traffic to the islands. The Port, since privatization, compelled the past administration to grant them an exclusive on local barge traffic. Along with this exclusivity, the Port has increased all charges to barge operators, and now levy tariff charges on any equipment operator that is hired to load the barges, even though the Port is supposed to, but does not provide this service. Similarly, ships that call the Port almost always must use their ship’s crane, yet are saddled with a crane charge for service not rendered.

The way forward with the Port is unclear, the situation further clouded by the specter of receivership over most of his assets, in which the principal of the port finds himself at the mercy of the Ashcroft’s Belize Bank. Attempts by the Bank to enforce receivership control of the Port were somehow staved off by Espat, who continues to keep management control of the facility. It should be noted that the aggregate debts by the Luke Espat enterprises represent the largest portion of the non-performing portfolio of the Belize Bank, and the Port is the only operating entity with any cash flow, which makes it a worthy target for Ashcroft takeover.

It is widely speculated that Ashcroft has hesitated in taking over the Port only because it would mean taking over a potentially serious liability in the condition that it is in, when taking into consideration the possibility of a physical collapse of the pier, the damages claim that will result, and the cost of replacing that asset. Certainly for the Bank, it is a better business prospect to have Espat continue to run it as long as he can, and keep those deposits coming into the bank as a token show of account activity.

For Belizeans, there is very little positive outcome to expect from this situation. While the port infrastructure continues to crumble in the shadow of the Ashcroft Alliance, and while the Port’s labour and commercial relations continue to become strained; businesses in Belize continue to suffer from outrageously expensive and grossly inefficient service.

The Guardian