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Sep 30, 2005

G.O.B. details Water Services buyback

Story PictureWhen the issue of repurchasing majority ownership of Belize Water Services arose, there were no fireworks. Both sides would agree that acquiring eighty-two point six-eight percent of the company, at a cost of twenty-four point eight million U.S. dollars would be in the best interest of the country. However, the Opposition would voice its reservations about the devils in the details.

Prime Minister Said Musa
“And whereas in response to popular demand it is the Government’s intention to retrieve and return the majority control in B.W.S.L. to the Belizean public. And whereas the government and CASCAL have reached agreement for the repurchase by the government of CASCAL’s entire shareholding in B.W.S.L. at the price of U.S. twenty-four point eight million dollars, that is at a rate of Belize one dollar fifty per share. And whereas the main terms and conditions of the share purchase agreement are as follows: one, down payment of U.S. fourteen point nine million payable on October third, 2005. Two, the balance of U.S. nine point nine million dollars to be paid over the next four years, with interest at a rate of ten percent per annum. Three, as security for the payment of the balance, government will pledge to CASCAL thirteen million, two hundred and twenty-nine thousand and twenty ordinary shares in B.W.S.L., representing the shares not paid for by the government. And whereas on receipt of the aforesaid down payment of U.S. fourteen point nine million, CASCAL will formally transfer its entire shareholding in B.W.S.L. to the government and will relinquish the management and control of B.W.S.L.”

Dean Barrow
“CASCAL declared in no uncertain terms: we have been defrauded by the People’s United Party government of Belize. And while none of us will shed a tear for CASCAL, what happened is important in the context of underlining once more the absolute immorality of this People’s United Party administration and what happened in terms of WASA and where WASA was when they sold to CASCAL.”

“Most important of all, CASCAL was able to coerce the Government into giving it a guaranteed rate of return of twelve percent on its investment. That guaranteed rate of return was made with the new company, Belize Water Services Limited. That guaranteed rate of return remains in place today, so that when government takes back the company it takes it back together with the guaranteed rate of return. I have not heard the Prime Minister say, any time in his speech: you know, we are going to eliminate that guaranteed rate of return.”

“CASCAL in fact initiated an international arbitration proceeding against the government with respect to the Water Services. 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 this bill of goods that you sold us on the basis of fraud. And that is why 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.”

A down payment of fourteen point nine million U.S. towards the purchase of B.W.S.L. will be made on Monday, with the balance being paid over the next four years. According to G.O.B., monies for the Belize Water Services buyback was made via a loan from the Republic of China on Taiwan.

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