Gas Station Regulations

Contact Greg who posts here as Coastal. He opened a Coastal Station/Supermarket in Sosua which is a world class operation and he is also a world class guy. Very knowledgable and forthcoming.

When discussing this with him at different times I would be discouraged to do this myself in the DR. I had a contract to build one with 25x60 Convienent Store for Hess in the US and the problems in the DR were more problematic than in the US is what I got out of my conversation with him.

Scott

scotpgot said:

Thanks. Will do.

Just out of curiosity, what kinds of things discouraged you? Price? Availablity of equipment/gas? Regulations?

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You need to speak to Greg, he is the DR expert, period, end of story.

Scotpgot, here is some info.

I apologize for the delay in posting but we have been without 2 of our 3 phones for more than three weeks now so it's hard for me to squeeze in internet time between the normal phone and credit card usage on one phone line. Thanks to Scott and Rob for your kind words (I will send a check ASAP)!! The reason that Scott mentioned how difficult it is is because I have discussed with both him and Rob before the laborous process that I went through to get the permission to build this gas station. The thing that makes it difficult is that you have to get permissions from many different government agencies and the red-tape and bureaucracy of the majority of these offices is astounding. I talking the belly of the beast type of experience. Plus, until you receive the building permit, the last step in a long string of approvals, you are not assured that you it will be approved. Thus, you can spend a lot of money on a lot, fees for the permissions with different agencies, and a lot of your time, only to have some government worker in some office reject your project and bingo, it's all over. It took me slightly less than three years to go through this process and it was a stressful and frustrating experience. I'll try to hit the high spots of the process as it existed when I did it and hopefully I will not omit anything major. However, if you want additional details on any part of it, I still have all of my files so I can dig it up and will be glad to share it with you.

1. Form a legal company and find your lot. You will be seeking your permissons in respect to a specific lot that you must either own or have an option to purchase. In addition to finding a location that would be successfull for a gas station, the lot must meet numerous guidelines established by the DIGENOR, environmental department, DEFINPRO (if applicable), Turismo (if applicable), and Obra Publica. These requirements specify minimum sizes, road frontages, visibility issues, soil specifics, minimum distances from other gas stations, schools, hospitals, etc, etc.. The lot MUST have a deslinde. If it does not, start this immediately as it is a requirement that can take 6 months to a year to complete and can be a major hold-up.

2. Once you have found your lot that meets the guidelines, you need to have a letter of intent from one of the gasoline retailers in the country. These are currently Esso, Texaco, Shell, Isla, Coastal and Nativa. You will need to visit their offices and speak with the department that handles the retail end of things, bring your information about your lot and convince them that it would be in their interests to have a gas station in that location. If they are interested, they will visit the location, do traffic flow analysis, etc., and if they think it is workable will issue you a letter if intent and draw a detailed set of construction plans for you. If they are very interested in your chosen area, this is usually at no cost to you.

3. Go to the DIGENOR (11 floor Huacal Santo Domingo) with your company info, title, certified check (check before hand the amount) and letter of intent, full set of plans, and you officially start the application process.

You will need permissions from the following departments. The permissions are issued consecutively therefore you must successfully conclude one in order to begin the other. You can not do this concurrently. Failure to gain approval at any of the governmental offices will stop the process and nullify your application regardless of previous approvals, taxes & fees paid, etc. I will list the approximate time required for the respective offices to process and approve/disapprove your application.

(Not necessarily in this order)
1. DIGENOR inspections 2 months
2. Local ayuntamiento. 4 weeks
3. Local bombero. 2 weeks
4. Local defensa civil. 2 weeks.
5. DEFINPRO (if applicable) 7 months
6. Defensa civil Santo Domingo 2 months
7. Bomberos Santo Domingo 2 months
8. Liga Municipal 2-3 months
9. Castastral 1 month
10. Turismo (if applicable) 2 months
11. Environmental
12. Obra publica's different departments (plans,edificacions, legal, electrical, etc.) 9 - 12 months
13. DIGENOR acceptance of planillo, building permit, issuance to operate 1 month

Now that you have premission to build, you can start to negotiate with the various fuel companies. Your previous letter of intent does not bind you to contract with that company. You do not need to worry about tanks, pumps, etc., as most all of the companies will furnish this type of equipment, but once again, how much you get depends on your negotiating skills.

The good news is that a gas station is a very good business in this country. Most will pay for themselves in 3 to 5 years. I have an old article from the Listin Diario business section that details the economics of a gas station and from my experience now I can see that was right on target. If you want I'll try to dig it up and post the link.

If you decide to build a gas station, I suggest that you come by and talk to me and I will be more than happy to help you with the process and tell some lessons that I learned the hard way.

Anyway, I hope this helps.

Gregory
coastal@codetel.net.do
(809) 571-2422
(809) 571-2421 FAX, but currently on the fritz

scotpgot said:

Thanks. Will do.

Just out of curiosity, what kinds of things discouraged you? Price? Availablity of equipment/gas? Regulations?

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Well regardless of what brother Robert says I will answer your questions.

First off I have never planned on opening a station in the DR. I was contracted by Hess to build one in the States and went through all the planning to the very end and didn't build it because of changes in laws going through at the time and not knowing if I would be able to proceed.

That being said I am a little familiar with roadblocks in NY, USA and have a general knowledge of the Gas business from dealing with Hess which btw was a world class operation.

Speaking to Greg and also having some knowledge about problems in the DR such as Graft, Corruption and Greed I had already formed the opinion that if I had to work in the DR for a roof over my head and food in my mouth I would NOT have moved there.

A lot of things are either difficult (or easy if you are a connected Dominican or Gringo) if you don't know the system and as a gringo it is difficult because the culture is something we were not brought up in and "I" find difficult.

If you follow what Greg writes you will get the synopsis of why I made my statement. Any further questions, just ask and I would happily answer.

Scott

PS> price, equipment and gas was the least of my worries. Containers can get to the DR in a few days and if you have to ask the cost you maybe shouldnt be looking into it