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Daily News - 12 June 2002

Power contracts annulled to save money
The commission in charge of renegotiating government contracts with private generators announced they had reached a first agreement yesterday. The agreement will revoke El Paso Energy's contract with Corporacion Electrica Puerto Plata for its two power plants of 19 and 50 megawatts. The government will pay US$35 million to rescind the contract. Cesar Sanchez, general administrator of the Dominican Electricity Corporation (CDE), said the renegotiation will save the state US$24 million a year. The contract obliged the government to buy power at a higher price than it was able to sell it. The renegotiation establishes that the 50-megawatt power plant (CEPP1) will sell power to the Edenorte distributor company for US$0.052 cents per kilowatt-hour, down from nine cents at present. The 19-megawatt plant will now join other uncontracted power generators that offer their electricity to the market. Power commission members are Minister of Finance Jose Lois Malkum; Superintendent of Electricity Julio Cross; CDE general manager Cesar Sanchez; advisor to the CDE Edwin Croes; Program for Blackout Reductions (PRA) director Roberto Duverge; director of the National Energy Commission George Reynoso and economists Andy Dauhajre and Jaime Aristy Escuder. The commission now moves on to the renegotiation of the Smith-Enron power plant contract. That plant has been shut down for three months. President Mejia has said that the contract, signed in 1993 under the Balaguer government, obliges the state to pay US$4 million a month, regardless of whether power is purchased or not. Smith-Enron is demanding US$104 million in arrears but the government recognizes a debt of only US$35 million.

More on the power negotiations
Edwin Croes, advisor to the CDE's general manager, explained the rationale behind the contract renegotiations when he appeared on the TV show Diario Libre AM. He said the idea is to draw up transparent contracts with the consumers' interests in mind. He explained that no matter how much competition there is in the electricity marketplace, several contracts bound the state to purchase power at above market prices. This meant that in the short and medium terms, there could be no decline in the high power rates that consumers pay. He said the President has formed a multi-institutional commission to help the CDE renegotiate these contracts and has authorized US$30 million in financing for starters. "We have half of the power produced in the country contracted at 10 cents a kilowatt-hour, when in the market we have achieved a price of seven cents a kilowatt-hour as part of the Madrid Agreement," he explained. The agreements benefit the power generators because they will reduce the arrears. He mentioned the government debt of US$40 million to Corporacion Electrica Puerto Plata-El Paso Energy, US$35 million to Smith-Enron and US$30 million to Metaldom. He said there can be no talk of reducing rates in the next three years given that there is little low-cost power being generated in the country. He said low cost power is produced only by hydroelectric, natural gas and coal-fired plants. Only now are natural gas and coal-fired plants being installed. Most of the plants in operation are fuel oil or diesel powered. He criticized the Fernandez administration for signing contracts with this type of power producer only 48 hours before the new government took over. Moreover, Croes spoke of what he called the brutal local resistance to paying for power in the Dominican Republic. He said the slum barrios account for only 6% of total consumption and that most of the power fraud is committed by the military, the middle class, the wealthy, and industries. He said power was recently cut off to the Santo Cerro Church in La Vega because the priests had never paid for the service.

Chamber of Deputies turns down loans
The Chamber of Deputies rejected four international loans that the Executive Branch had sent for approval. One of the loans turned down yesterday was for US$38.7 million to expand and buy new equipment for the Ramon de Lara military hospital. Likewise, the Chamber of Deputies rejected a US$18 million loan for equipment for rural clinics. Another loan for $7 million euros for the Moncion hydroelectric project and San Francisco de Macoris electrical substation was not signed. Likewise, the deputies did not accept a US$7 million loan for the Santiago Presidente Estrella Ureña public hospital.

Herrera Airport off limits for city government
Hoy newspaper reports that the director of the Airport Department Carlos Alvarez Guzman has disputed a statement by Santo Domingo West mayor-elect Francisco Peña who wants to install his city government offices at Herrera International Airport. Alvarez said once the La Isabela International Airport in the northern part of Santo Domingo Province is in operation, the Herrera International Airport grounds will be transferred to private contractors as agreed during the Fernandez government. The contractors received the land as part of payment for the construction of the Duarte highway. Alvarez said there is no room in the airport for the new municipal government to locate any kind of provisional offices either.

Strike at Post Office
Postal carriers are on strike. They complain of not having received their paychecks in two months. Meanwhile the mail is piling up at a rate of 400,000 letters per day according to El Caribe, which estimates that there are 800 carriers who deliver about 500 letters each per day. They have been off the job since last week demanding their past-due pay.

Boat people found alive
More than 60 people who were feared dead were found in the Atlantic Ocean north of Puerto Plata after spending 14 days at sea. They had left on 30 May on an illegal boat trip to Puerto Rico. They were rescued late last night by a Navy ship after an Air Force surveillance plane located them off Cabo Frances in the Silver Banks, 70 miles north of Puerto Plata. A fishing boat in the area had already assisted them. They were taken to Puerto Plata to be treated for dehydration and serious sun burns.

Chinese travelers to be deported
El Caribe reports that the Dominican consul to Cap Haitien, Haiti, was not authorized to issue visas to a group of 16 Chinese citizens who were detained for illegally crossing the border from Haiti. Consul Guillermo Radhames Garcia is only authorized to issue visas to Haitian nationals. Immigration director Miguel Vasquez said that Garcia should have sent the Chinese citizens' passports to the Ministry of Foreign Relations, where the decision would have been made. The Ministry banned Dominican consuls in Haiti from issuing visas to citizens from other countries after an extraordinarily high number of visas were issued, which led the authorities to suspect irregularities. Some 20 military personnel have been suspended for having allowed the Chinese to enter when the border was closed. So far this year 62 Chinese nationals have been arrested. The media reports the speculation that most of them try to use Haiti and the DR as a link to Puerto Rico or Miami. Hoy newspaper says the US government will pick up the cost of deporting the Chinese citizens back to China.

Cement vs. tourism development
A former deputy secretary of tourism for southwestern Pedernales questioned how the government could back the installation of a cement factory on the same site that it proposes to develop tourism projects. In an interview with Hoy newspaper, Rafael Mendez Risk disputes the use of the 32 km. white sand beach in Cabo Rojo to build a cement factory. He explains the area has prime tourism development potential and is where major tourism projects should be built in order to preserve the Bahia de las Aguilas beach as a reserve where tourists could go for day trips.

Roberto Salcedo's priorities
According to an interview published today in the Listin Diario, Santo Domingo's new mayor will give priority to a major clean up operation in the first 100 days of his administration. Roberto Salcedo's term begins 16 August. He won on the PLD ticket, an opposition party. He says also on his agenda are meetings with private garbage collection companies to determine their capacity, schedules, payment terms and pending debt. Once he enters office, Salcedo plans to start a major education campaign to get city residents to sort their garbage and stop littering. He will dot the city with trashcans so people cannot say they couldn't find a place to put their garbage. He also has plans for frequent street cleaning and fumigating for pests. Next on his agenda is the zoning of the city. He sympathizes with the people who purchased property in an area limited to three floors and now find seven-story towers next door. He says in his government, regulations will become clear regarding where towers can go up. But he says that people who live in the National District have to come to grips with the reality that the city is growing vertically. He promises to build three daycare centers to care for children of workers, and will also oversee the operation of municipal funeral homes in the barrios. He promises not to employ show business people in the city government. Instead, he said the city will be in the hands of technicians and specialists in each area. "This is not an old boys' club, this is a city that demands solutions to its problems." Before the separation of the Province of Santo Domingo from the National District, the government of Santo Domingo oversaw a territory of 1,382 square kilometers and a population of 2.1 million people (1993 census), and had a budget of RD$60 million a month. Today the numbers are much smaller: 104 square kilometers, 911,000 people and a budget of RD$25 million. The National District has a mayor, a deputy mayor, a senator, 18 deputies and 36 aldermen. Neighborhoods that Salcedo will govern include: Hondonada Isabela, Palma Real, San Diego, Los Peralejitos, Altos de Arroyo Hondo, Arroyo Manzano, Nuevo Arroyo Hondo, Cerros de Arroyo Hondo, Los Rios, Nuevo Arroyo Hondo, Jardin Botanico, Viejo Arroyo Hondo, Cristo Rey, La Agustinita, Villas Agricolas, La Zurza, Luperon, Simon Bolivar, Espaillat, Gualey, Maria Auxiliadora, Domingo Savio, Mejoramiento Social, Villa Consuelo, Villa Juana, La Fe, Villa Francisca, San Carlos, Gazcue, Miraflores, La Esperilla, La Julia, Matahambre, Cacique, Bella Vista, Tropical, Jardines del Sur, Miramar, Honduras del Oeste, Honduras del Norte, Buenos Aires, Cacicazgos, Renacimiento, Mirador Sur, Mirador Norte, Bella Vista, Restauradores, Renacimiento, El Millon, San Geronimo, Los Prados, Julieta, Paraiso, Piantini, Naco, Centro Olimpico, La Esperilla, La Julia, Ciudad Universitaria, and San Geronimo.
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