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Jan 9, 2014

PUC Chairman says Fortis rights of first refusal for waterways was signed in secrecy

Now, Belize Electric Company Limited operates the Chalillo, Mollejon and Vaca Hydroelectric located in western Belize. BECOL is owned by Fortis, the former Canadian owners of the utility company…prior to G.O.B.’s takeover in June of 2011. PUC Chairman, John Avery, says that while Fortis has preemptory rights of first refusal for waterways, that contract was executed in secret and is not enforceable.

 

John Avery, Chairman, PUC

“The upper Macal is where they have their three plants right now, BECOL. So for that, any construction of any plant in between those three plants would require BECOL’s consent, which is reasonable as long as it is not withheld unreasonable. However, there is an agreement with Fortis that gives them right of first refusal for all rivers in Belize in terms of Hydro-development. We don’t believe that agreement is enforceable. We don’t believe that it was an agreement signed by the former prime minister. We do not believe he has the right without going to the national assembly to give all such rights to one company for all the rivers in Belize and in fact, that agreement violates many laws in Belize. We have a Water Resource Management Authority in Belize right now who has ownership under that law of all waterways and all waters in Belize. So they dictate the rights for waterways in Belize. So it is contrary to the Electricity Act, to the PUC Act, to many things. So we do not believe that agreement for the rest of the rivers is enforceable. And although investors may be weary of it, if we get an indication that it is an impediment, then certainly we will have to take the steps to challenge it legally or otherwise.”

 

Reporter

John Avery

“But how much of a disincentive is that to prospective developers knowing that perhaps if I proposed such a project it might be tangled up in court, I might be the subject of legal action and again is that a disincentive against developing hydroelectricity as a power source?”

 

John Avery

“The agreement, like I said, is between B.E.L., the Government of Belize—well it was signed by the former prime minister on behalf of the government of Belize in secret—so as far as we are concerned, it is not enforceable. Now I could not tell you to what extent it will discourage potential investors; certainly it is a concern, but given the recent ruling with respect to the CCJ and the authority of the prime minister to commit the government in matters like this and financial matters, even if there is a legal battle to be fought, it is the PUC and perhaps the government that will fight that battle and we don’t see that taking any prolonged time to deal with. It is simple matter and there is precedent already set.”

 

When we checked with BECOL reps, we were told that the PUC at the time was well aware of the agreement and raised no objections; so there was no secrecy to the agreement.

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