When government acquired BTL last week, it was all about the accommodation agreement. We've all heard it repeated dozens of times in the last year, but what is it really? The Accommodation Agreement was a secret document signed by the Musa government in 2005. In it, government agreed with BTL that if the phone company accommodated government by picking up the $19 million tab for certain Intelco bad debts which government had secretly guaranteed with public funds – then the phone company could recover the money by with-holding payments of tax.
Basically one bad deal to replace another – moving the burden for those Intelco guarantees from taxpayers to BTL's rate payers. And when BTL did not make enough to gets its guaranteed 15% rate of return which the agreement promised, it could just with-hold taxes. The agreement and its subsidiaries have today been published in full on the government website. We had our first look in June of 2008 – and tonight as a sort of Cliff Notes version, we reprise that story.
For months, the secret accommodation agreement that the past government signed with BTL has been a matter of speculation and inquiry. But because of a secrecy clause, the press or the public hadn't seen it. In fact when the barrow administration was elected, there wasn't even a copy to be found anywhere in the government. Now that's top secret! But now government has gotten a copy of the agreement from BTL – and with the outlawing of secrecy clauses in the amended Freedom of Information Act, it was released yesterday. We got it this afternoon, and here's some of what we found.
Jules Vasquez Reporting,
This is the accommodation agreement. The principal document is 31 pages and is built around this, government's agreement to cover its Intelco losses by selling 4 former Intelco properties to BTL for $19.2 million.
Government also agreed to a 15% minimum rate of return for BTL – and according to schedule 2, that minimum return must be calculated to include, quote "any assets acquired...by BTL in the performance of this agreement." So that means the $19.2 million used to cover Government's Intelco exposure, is to be paid by you the ratepayer, in your phone bill.
And article 11.4 is where all the current problems begin. It notes that in the event that BTL fails to achieve its minimum rate of return, the government has to compensate BTL – and if that isn't paid in full by a specified deadline, then the shortfall "can be set off by BTL against the amount of any taxes including business tax, sales tax or other taxes" payable by BTL to government.
But that's not all the agreement does. There are also 10 other undertakings that make blanket giveaways and concessions to BTL, including government's undertaking that only BTL and Speednet – which is SMART can operate as phone companies in Belize for a period of 15 years. As regards Voice over internet, Government undertook for a period of 15 years that no class license holder is permitted to use voice over internet known as VOIP technology.
And there it is signed in secret by the Prime minister and the BTL Chairman Keith Arnold 19TH September 2005.
BTL's new government appointed board of directors is expected to repudiate that Accommodation Agreement. Ashcroft's corporate cluster claims to have done that on the morning of Monday August 24th before the telecommunications amendment act was introduced in the house.
