The former owners of Belize Telemedia Limited (BTL) and Belize Electricity Limited (BEL) have gone to the Caribbean Court of Justice (CCJ) requesting that if the Government of Belize should lose the appeal, the court should order that both companies should be given back. Part of their argument is the Government has somehow mismanaged BTL and BEL.
Readers may be aware that the CCJ has heard the final cross appeals from both the Government of Belize and the Ashcroft Alliance, which owned BTL, and Fortis Energy International, which owned BEL. That case happened on December 10 – 12 of 2014 at the seat of the CCJ in Port of Spain, Trinidad and Tobago.
An appropriate reminder of the events which have led to this point in the life of the two utility companies is to recall how and why the Government nationalized them both. Up until 2009, the Ashcroft Group of Companies owned BTL, but by that time, the Barrow Administration and the rest of the country had learned about all the questionable contracts and business decisions that the Musa Administration made with businessman Michael Ashcroft.
The Government and the majority of the population believed that Belize and its citizens would be served – their interests better protected – if the telecommunications company was in the hands of the public. So, the Government Nationalized the company in 2009, and it re-nationalized the company once again in 2011. The acquisition for proper public purpose is something which the Government continues to rightfully vigorously defend, and as part of the re-nationalization process, the Barrow Administration passed the 8 amendment to the constitution which made it law that the Government and people of Belize should always have ownership of BTL. The 8th amendment also sought to insulate the nationalization process from legal challenge, which has become the mode of operation of Michael Ashcroft, to try to crush the government under a barrage of litigation.
In the case of BEL, Fortis Energy International owned the company up until 2011. That’s until the management requested that the Public Utilities Commission increase the electricity rates beyond its usual cap. They claimed that up until that point, oil prices had crippled their profis, and that if this rate increase didn’t happen, they couldn’t guarantee that countrywide rolling blackouts wouldn’t happen, since they were buying a large quantity of power from the Mexican Government’s Electricity grid. The Public Utilities Commission, which is tasked with the responsibility of protecting consumers while allowing the private owners to make a fair profit, refused to allow such an abuse of the Belizean people. That’s when the Fortis management threatened that these rolling blackouts were a real possibility. So, that’s when the Government stepped in and nationalized the company, providing the stability that the Fortis management refused to guarantee.
The nationalization of BEL was almost identical to that of BTL, and so that’s why both cases have made their way through the Supreme Court, the Court of Appeal and the Caribbean Court of Justice as one case.
The CCJ has reserved judgment in that case to be delivered sometime in the near future, but on January 23, attorneys for both sides went back to the Caribbean Court of Justice to make submissions to the panel as to what reliefs should be granted. The judges wanted to be informed of all the possibilities that are available to them in deciding the future of both utility companies.
Naturally, the Government has submitted to the CCJ that the acquisition of both utility companies is lawful, and that it should only have to pay the compensation to each of the former owners. If the CCJ does not agree with the Government and rules that the acquisitions to be unlawful, the GOB wants the judges to allow the companies to remain nationalized. But, the Government is willing to concede that the former owners would then deserve an award of damages, which the judges of the CCJ would decide.
The former owners are pushing that if the acquisition is ruled unlawful, and they are vigorously asserting that it is, they want the CCJ to order the Government to give it back to them and still pay damages. Additionally, the British Caribbean Bank, whose loan was acquired by Government when the company was nationalized, is pressing for the GOB to pay that loan, since it has been 6 years.
Part of their argument as to why the companies should be given back is that the Government controlled managements have mismanaged the companies, and that the services are being sold at an under-value. Let’s look at that misinformation more closely.
Since Government took over BTL, Digicell4G was launch, which took the customers from ice ages of data speeds, once known as edge to speeds comparable to the fastest DSL speeds in the world. That’s right on your mobile phone. Additionally, with the blessing of the Prime Minister, the company doubled DSL internet for half the prices they used to cost. That has happened 3 times, which means that customers experienced a 50% reduction in rates. Voice over internet protocol or VoIP as it is known, was finally opened, something which the Ashcroft management tried to keep locked away because it was a threat to their profit margins. Take that into context of the rest of the world which had VoIP services for almost a decade before. Also pre-paid text bundles have gone down, and international calling rates have gone down twice. GST was taken off Digicell4G, and so that service was also discounted to customers. With all those benefits to be a BTL customer, it is hard for a reasoned individual to accept the Ashcroft Alliance’s argument that the company has been mismanaged. BTL customers are finally experience close to the cutting edge of technology, something which was severely retarded under the former management.
So, then, how about BEL, where has the Government somehow mismanaged that company? Well, since Government took over the electricity company, there have been no rolling blackouts, and the delivery of service has been almost 100% stable. There have been no rate increases like what the Fortis Management wanted, and in fact, rates have decreased 4 times since nationalization and still the company is turning in a profit.
These private owners only want to keep the Belizean people oppressed so that they can return to the gross over-profit for second-rate services which they were providing. But, everyone must wait and see what the Caribbean Court of Justice will have to say about the future of these two important companies.