If you ride the bus with any regularity, you'll need to take note of major changes that are about to occur in the troubled transportation industry. Government has now decided to break up Novelo's and sell it off, basically into four different parts to smaller bus lines.
It's a perverse policy reversal because the opposite strategy was pursued between 1999 and 2001 when, with approval and financing from government, Novelo's systematically gobbled up many smaller lines to become a functional national monopoly. When that costly and ill-managed experiment collapsed into receivership in March of this year, in its ruins, it left $53 million in debt, $30 million of it guaranteed with public funds, and a barely functional national bus service.
A Cabinet subcommittee on transport has decided that the solution now is to divide the country's bus runs into four franchises, north, south, west, and Belize City. These will be tendered out to existing bus operators along with all the terminals, busses and routes that go along with the territory. But instead of the conventional two year license for, successful bidders would receive a 15 year license at an additional price. That 15 year license will be exclusive, which will be a problem for those small operators who don't get in on the regional franchises. But government foresees, perhaps idyllically, that the small operators would band together and form cooperatives to take over the regional routes.
Idylls aside, there is the matter of the assets and the debt, owned by the Atlantic Bank and the DFC. With $53 million in the balance, for assets worth about a quarter of that, the consensus is that both lending institutions will take major losses with the worst accruing to the DFC which has second mortgage.
It's a solution that seems to pose as many problems as it hopes to solve, and at this point we are told it is just a proposal that will be put to the industry over the next two weeks.