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Daily News - 11 May 2001
Canadian firm to build US$100 million aqueduct
The Dominican government chose the Canadian firm SNC Lavalin International for the construction of the RD$1,600 million aqueduct in the Southwest. The aqueduct is programmed to supply water to some 400,000 inhabitants in the southwestern provinces of Barahona, Bahoruco and Independencia. Ambassador Bruno Picard of Canada was present during the signing of the contract with the Instituto Nacional de Aguas Potables y Alcantarillados (INAPA), the government potable water department. The Canadian company will finance RD$600 million of the cost.
Government moves ahead to issue sovereign bonds
The Dominican government chose to go ahead with the issuing of the first Dominican sovereign bonds. Advocates of the bond say it will give the government the resources to reactivate the economy and carry out construction projects.
The government appointed economist Andres Dauhajre to head the Unidad del Programa de Mediano Plazo de Financiamiento Externo, which will direct this program. Other members of the unit are the Technical Secretary of the Presidency and the Governor of the Central Bank.
Those that oppose the bonds do so on grounds that all the talk of the present administration to discredit the country's growth in the past will result in having to place discounted bonds on the market. Likewise, the use of the funds generated by the bonds is being questioned. The government has full discretionary use of the funds. Sectors criticize that so far the government has used funds generated by the new taxes to hire additional public employees to pay back political favors.
Social Security Law
President Hipolito Mejia has signed into law the Social Security Bill. He did so during a meeting of the cabinet on May 10 to commemorate the third anniversary of the death of PRD party leader, Dr. Jose Francisco Peña Gomez. The signing of the law starts a complex process to create a bureaucracy to manage the program that will provide all Dominicans with health and retirement plans.
Opinions on the outspoken legal advisor's controversial statements
As reported in Hoy newspaper, the government and the PRD have rejected the positions expressed by the legal advisor to the President, Guido Gomez Mazara. He referred to making modifications to the Constitution "above whomever it may be", and said that all government jobs and social programs should be for PRD members. See http://www.dr1.com/daily/news051001.shtml
President Hipolito Mejia said his government would not intervene to modify the Constitution so that only 40% of votes are necessary to win the presidency in 2004. He said Gomez Mazara spoke that way to gain political favor among his followers. Nevertheless, he said he can't stop anyone in government from speaking their mind. "These are voices that have to be respected, but I am the official spokesman of the government," said Mejia. The President of the PRD, Hatuey de Camps, said that Gomez cannot speak for the PRD. He said social programs have to be for all Dominicans.
Reinaldo Pared Perez, the secretary general of the PLD, an opposition party, said the statements were "serious, inconceivable and indescribable." PLD Senator Enrique Martinez said the statements were an "attempt against democracy."
Donald Reid Cabral, acting president of the PRSC, another leading opposition party, expressed his concern. He commented "You think those things, but you don't say them," he said. Political secretary of the party, Federico Antun said the statements are treason against the memory of PRD leader Jose Francisco Peña Gomez.
Father Rogelio Cruz said the comments bring discouragement and despair among the population.
Participacion Ciudadana expressed their concern since the statements come so soon after the government appointed a commission to propose changes to the Constitution.
President of the Senate, Ramon Alburquerque (PRD-Monte Plata), justified Mazara's comments and explained that in party meetings topics are addressed from the point of view of party members. Alburquerque is a strong advocate of the changes proposed by Gomez Mazara.
Legal advisor stands by his words
Meanwhile, Gomez Mazara assumed full responsibility for the statements he made during the party meeting. He said he had no problem with defending his ideas and what surprised him was that the video was not shown earlier, as it was taken on 29 April. He confirmed that the PRD would reduce tp 40% the percentage needed to win a presidential election.
Former President absolved from corruption charges
The Court of Appeals of Santo Domingo yesterday absolved former President Salvador Jorge Blanco (PRD 1982-86) and his government collaborators of all criminal responsibility. The judges cleared the former statesman and collaborators Retired General Manuel Antonio Cuervo Gomez, Leonel Amonte, and Juan Tomas Peña Valentin of all charges of corruption in office.
Economic stats update
El Caribe reports that government income was 22.9% more in the first trimester of this year compared to the same period in 2000. However, the government had hoped for a 29.6% increase in revenues, as established in the 2001 National Budget.
To cover the deficit, the government borrowed RD$800 million from private banks to be repaid later this year.
El Caribe points out that one of the complaints is that the new funds went to meet increased payroll expenditures after the government hired thousands of party members who helped bring the PRD back to power after 14 years.
The government implemented new taxes in January, such as a 1.5% tax on monthly gross income for companies making more than RD$6 million in sales a year, an increase in the ITBIS from 8 to 12%, an increase in the petroleum tax and other tax hikes. But a slowdown in the economy resulted in a slowdown in tax payments.
El Caribe reports that the inflation rate of the past 12 months was 9.58%. Forecasts are that inflation this year will be the highest in five years.
Rosario tender winner to be chosen on 18 July
Miguel Peña, director of the Unidad Corporativa Minera, said the government would choose the winner of the Rosario Mining 25-year contract on 18 July. He said the state will receive 42-52% of the earnings, depending on international market prices. He explained that the winner of the tender will pay the state 3.5% of gross sales, 25% in income tax and 10-15% of the net profits. He said five companies qualified for the tender. The Rosario gold mine is one of the largest in the world.
July power bill increase confirmed
The government expects to generate RD$100 million a month by increasing residential, industrial and commercial electricity bills by 20-40%. The increases will affect all who pay more than RD$1,500 a month. The Minister of Industry and Commerce Angel Lockward announced that the measure will go into effect next month and will show up on July bills. President Hipolito Mejia said yesterday that the increases will not affect the economy. But the president of the electricity committee, Hugo Guiliani, has warned that the increases will be highly inflationary. Hoy reports that consumers in the Dominican Republic already pay the fifth highest power costs in Latin America.
Generating company says distributors get it all
In a press release published in daily newspapers, EGE Haina accuses the Dominican government of favoring the distributor companies over the generators, the government and consumers. EGE Haina says this is taking the country from a power surplus to a power deficit and an increase in blackouts.
The company explains that the Ministry of Industry and Commerce has not paid a single bill to the generators "to compensate for the difference between the real price of fuel and the artificial price". It is taking its case for discrimination to the courts.
EGE Haina disputes what the government has been referring to as "subsidy" saying "the subsidy as it is conceived has not affected, even by a cent, the prices paid by consumers and the only beneficiary so far has been the distributors," explains the generator.
The company explains that the delays in payment from the government create high financial costs for the generators, thus increasing the cost of power produced.
Civil suit against owner and builder of toppled movie house
Hoy newspaper reports that the parents of one of the workers who died in the toppling of the Palacio del Cine under construction in Santiago have presented a legal claim for RD$50 million in damages to the builder and the owner. Their 20 year old son, laborer Paulino Martinez Toribio and six other persons died when the building collapsed on Saturday, 28 April.
The family Hernandez Veras also announced it would sue Burger King, the owner of the building, Gustavo Turull and engineer Horacio Alvarez for RD$50 million for psychological damage to a mother and her two children who were purchasing a burger when a mass of concrete fell from above. Burger King is located next door to the toppled building.
Meanwhile, Carlos Manuel Estrella, commentator for the Listin Diario, says in a recent column that the Dominican Penal Code does not contain a penalty for owners or builders of buildings that collapse. He explained that they most likely will not have to face criminal charges. Civil responsibility is another matter but the case could go on for years.
Construction spokesman explains 40% increase in wages
The vice president of the Chamber of Construction, Cristian Maluf, explained the 40% wage increase for construction workers. He said that for a long time construction workers have been paid 35% more than the minimum wage. He said by increasing the wage to 40%, in reality the laborers will only receive a 5% increase. He denied this will affect the cost of construction in the DR.
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