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Daily News - 27 April 2001
DR1 Daily News takes a break
The DR1 Daily News will not be published on Monday, 30 April. Monday is a holiday in the Dominican Republic as it commemorates Labor Day which actually falls on Tuesday, 1 May. Our Tuesday news report will compile briefs from
the preceding Saturday, Sunday and Monday as well as for Tuesday, 1 May.
President Mejia says major works will be privately-built
President Hipolito Mejia announced yesterday that major construction works will be assigned to private contractors who will recover their investment through tolls or fees paid by consumers who use them. The government recently announced the construction of a railway system, where the state would be providing the property on which it would be built. President Mejia yesterday announced that a private company will build the expansion of the San Cristobal-Baní highway and another group will redo the Port of San Pedro de Macoris, also under a government concession.
Mayor moves his offices following power struggle
Mayor Johnny Ventura abandoned the Santo Domingo municipal headquarters last Thursday and moved his offices to the Palacio Consistorial in front of Columbus Park. Hoy newspaper says he did so because of a conflict with Waldys Taveras, who is the coordinator of PRD aldermen at the municipality. According to the newspaper, Ventura's row with Taveras is because the latter served as private consultant to a company that disputes the 2,000 meters that Ventura claims for the municipality at Avenida de los Proceres.
Firings at Ministry of Sports
Hoy newspaper reports that the Ministry of Sports has begun firing people. Reportedly, the ministry staff increased from 2,500 at the start of this administration to 4,500 at present. Earlier, the Ministry had ordered an across-the-board wage reduction. But apparently this was not enough and staff are being let go to meet the budget constraints. Hoy says the first to go are the long time and more experienced employees, not the new employees hired by the PRD. The newspaper says that while the employees are being told the lay offs are due to an austerity plan, others on the payroll are receiving money to make payments on their newly purchased luxury vehicles.
Lockward vs. Ovalles over power plan
Minister of Industry and Commerce Angel Lockward told El Siglo newspaper that the Superintendent of Electricity does not have the authority to speak on behalf of the government about a plan to reduce the subsidy on the electricity rates. He said Superintendent Ovalles has put out incorrect information. See http://www.dr1.com/daily/news042601.shtml
"The Superintendent is not handling that topic, he doesn't know about it, and the person who speaks on this issue is myself," Lockward said during a press conference. He said the decision to cut the subsidies has not yet been made.
El Siglo reports that on Monday, 23 April, a meeting with officials from CDE, Edenorte, Edesur, AES and Lockward was held at the Ministry of Industry to discuss cutting the subsidies. El Siglo says Lockward left the meeting 40 minutes before it ended. It was during this meeting that the parties agreed Superindent Ovalles would be the spokesperson. The plan seeks to bill residents in low income barrios where most residents have never paid for their power consumption.
Industry & Commerce vs. Foreign Relations
El Siglo newspaper reports on another conflict between a government department and the very active Minister of Industry and Commerce. Santiago Tejada, who is in charge of trade negotiations at the Ministry of Foreign relations, reportedly criticized Angel Lockward's handling of DR negotiations on the Free Trade Agreement of the Americas. The Mejia government gave Lockward the power to lead those negotiations.
Tejada says that Lockward has kept matters very much to himself, violating the openness and participatory nature that characterized trade negotiations lead by the National Trade Negotiations Commission (CNNC) based at the Ministry of Foreign Relations. Tejada said that Lockward's attitude is creating conflicts and difficulties in the negotiation process. He advocated a return to open participation for all sectors of society and business as occurred in the past. "Since the Ministry of Industry and Commerce has been handling the negotiations, participation is restricted and the delegations are very limited and only made up of those he hand picks in a very limited and hidden way and that has to be resolved."
He said officials of the Ministry of Foreign Relations met with the President on the idea of returning the Free Trade negotiations to the Ministry of Foreign Relations. He said that in the meantime, Foreign Relations has continued working through the CNNC because the decree that passed the management of FTAA to Industry & Commerce did not eliminate the work of the commission. He commented this has lead to a duplication of efforts.
11% inflation in 2001?
El Caribe newspaper reports that a recent International Monetary Fund report estimates inflation in the DR will be 11% this year. The Central Bank, on the other hand, has forecast single-digit inflation for this year. The IMF concurs with the Central Bank that the economy will post a 6.5% growth rate by the end of 2001.
Slight reduction in fuel prices
Regular gasoline is now RD$37.38 (down from RD$38.16)
Premium gasoline RD$43.08 (down from RD$43.82)
Regular diesel RD$22.42 (down from RD$22.75)
Premium diesel RD$24.68 (down from RD$25)
Propane gas RD$17.25 (down from RD$17.52)
Taiwan donates 10,000 bicycles
The Chamber of Commerce of Taiwan in the DR has donated 10,000 bicycles worth about RD$1 million.
The Ministry of Education will give the bicycles to children living in rural communities so they can ride to school. The bicycles had been announced as part of the Mejia administration's social program that seeks to compensate citizens for increases in the cost of living due to recent economic measures.
Power already too expensive
Economist Andres Dauhajre says that it is unfair for the government to authorize an increase in power bills since Dominican consumers are already paying the highest rates in Latin America. He said the government should instead focus on renegotiating the contracts signed with power generators that he says are charging abusive rates. He urged that whoever the government appoints to do the negotiating not have any ties to any of these companies.
Hoy newspaper editorializes today that President Mejia won many votes with his campaign promise to revise the electricity privatization contracts, a promise he has not kept.
The newspaper comments on reports that the government will increase power bills 18-40%, in order to be able to reduce the subsidy on power consumption. The paper says the decision will penalize the middle class and businesses because it applies to those that consume more than 725 kilowatts a month.
"What nobody is talking about is the kilowatt-hour cost, the most expensive in the Western Hemisphere and one of the most expensive in the world," highlights the newspaper. It emphasizes that to make matters worse, the kilowatt-hour cost increases with consumption.
President of the Senate Ramon Alburquerque says the General Electricity Bill once it becomes law would enable the government to review the contracts signed within the first 90 days of the new law going into effect.
Social Security, an unbearable burden for the next government?
The director of the Economy Department of the Pontificia Universidad Catolica madre y Maestra (PUCMM), Father Jose Luis Aleman, said the social security bill will bring major problems for the government. He said the government will have to make a contribution to the pension plan of 7.5% of each employee's salary. He said the next government will inherit big problems trying to comply with the law recently passed. This government has said it will take at least 18 months to prepare the bureaucracy to implement the program. Father Aleman said the present government will get the credit for the bill, but the next government will get the brunt of having to find the cash to make it effective.
Despite being an economic advisor to President Mejia, Father Aleman criticized the excessive number of employees hired by the Mejia administration. "Now they are not being called deputy ministers, they are known as delegates of the President of the Republic," he said. He said this situation is causing a hole in government finances, because each presidential delegate earns RD$15,000 to RD$20,000.
Taking the former President to court
Former President Leonel Fernandez is accused of defrauding the state of RD$35,000 million in connection with the privatization of the Dominican Electricity Corporation. A group of private citizens presented the case to First Instance Court of Judge Enrique Marchena.
Also accused of fraud are Antonio Isa Conde, former president of the Commission to Reform Public Enterprises; Temistocles Montas, former Technical Secretary of the Presidency; Marcos Cochon, former Superintendent of Electricity; Radhames Segura, former manager of the CDE; and Hector Valdez Albizu, former Governor of the Central Bank.
The investigation that led to the case questioned the legal procedures that cover the privatization of state enterprises. It was prepared by Casals Victoria, an advisor to the Senate who was administrator of the CDE for many years during the administration of Joaquin Balaguer.
Several senators that read the report commented it was a political case that seeks to affect the former stateman's
popularity, rather than an impartial or professional investigation.
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