On Monday the government will take over management and control of BWSL, making it the first time that the government has re-nationalized a company after privatization and in this case its one that bears the hallmark of a failed privatization. On Monday the government will pay Cascal US$14.9 million equivalent to 60% percent of the company's share capital. That US$14.9 million comes in a soft loan from the Taiwanese government. Government will finance from Cascal the acquisition of the remaining shares valued at US$10.9 million over the remaining four years.
It's a big money deal but the bottom line for consumers is that it does not mean lower rates, in fact those rates may continue to increase. But, still this morning in the national assembly when the government presented a motion to formalize the buy back, the PUP members called it an opportunity to restore Belizean control to a national utility...while for the opposition it was only a way to salvage a costly commercial misadventure.
Rt. Hon. Said Musa, Prime Minister
"Madam Speaker the taking back of the controlling ownership, or majority control, of BWSL by government, and eventually by the Belizean people, is being done in response to popular demand. As a responsible and responsive government we have heeded the call of the Belizean people."
Hon. Patrick Faber, UDP Collet Area Rep.
"Why is it that the government is in this instance trying to make it seem like they are heeding the demand of the public out there when in fact the public on so many other occasions have made cries and pleas to the government."
Rt. Hon. Said Musa,
"I listened to the member for Collet and the truth of the matter is he was uttering, and I don't think this is un-parliamentary, rubbish. He was uttering pure unadulterated rubbish when he tried to suggest, well first of all he doesn't understand basic words much less concepts."
Hon. Francis Fonseca, Freetown Area Rep.
"That privatization has not satisfactorily met our goals as a government and so today we are doing the right thing, we are doing the right thing in this 55th year of the life of the People's United Party, the greatest most successful political movement in Belize. We're doing the right thing because our people have asked to do the right thing and we're doing the right thing because we understand the critical importance of ensuring that we have good effective water services in Belize."
Hon. Dean Barrow, Opposition Leader
"You will turn around, come to this National Assembly, beat yourself on your chest, and expect us to congratulate you for, you say, attempting to set right this most grievous error that you committed back in 2000? Give us a break please Madam Speaker. Cascal kept asking for increases in rates and got several increases in rates so when the government comes as though well we
have not missed a beat: we sold the water services in 2000, we're taking it back in 2005, and Glory Hallelujah nothing has happened. In the meantime consumers have been burdened by increased rates Madam Speaker without any commensurate increase in the quality of services. But Cascal was in a position where it could claim the moral high ground. Cascal could say to the government, or say to the people of Belize it is your government that sold us a bill of goods. It is your government that therefore has to give us a rate of return, has to guarantee us dividends of $7.9 million I think it is annually because if they don't do that we will take them to court, that is what has obliged the buyback. Cascal said to government either you will pay us millions by way of damages at the end of the arbitration process, because clearly the government was sure to lose, or you will relieve us from this burden, you will take back the bill of goods that you sold us on the basis of fraud. And that is why the government has to buy back the water services. Cascal wants to rid itself of the water services because of what it found when it got there contrary to the representations that had been made by this government. So don't come here and play righteous with the Belizean people. Belizean people need to be very conscious of what is happening here and the government cannot be allowed to get away with their smoke and mirrors act trying to portray what is in fact a fiasco as some kind of triumphalist deal that they have engineered."
Hon. Ralph Fonseca, Minister of Public Utilities
"Belizeans do want to own BWSL so we can start on that premise, we all agree to that, and that is what this government is accomplishing that no other government has accomplished with any privatized entity for whatever reasons. So it is a fantastic accomplishment. The Prime Minister has been very clear that the majority of these shares will be going to Belizeans and he has defined Belizeans as being Belizean individuals and Belizean companies that are majority owned by Belizeans."
Rt. Hon. Said Musa,
"I believe this is a very historic motion that we are passing today in this honorable House. Instead of giving credit for the meritorious work of this government in putting the water company back into the hands of Belizeans, they prefer to gripe on the other side about things that may have happened in the past, a lot of it totally distorted as they have put it, and as the Minister for Public Utilities has clearly laid out the facts, I believe this House will be guided by the facts and will give an overwhelmingly support to this motion."
