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Good deal for Union Fenosa According to El Caribe newspaper, Union Fenosa struck a very good deal with the Dominican government. In 1999 they paid US$210 million for the rights to distribute power in the Dominican Republic. Five years latter, the government agreed to pay them US$423 million for the right to rescind the contract. As reported in Hoy, the director of the Institute of Energy at the state university, Jose Luis Moreno feels that the government should have been intervened the companies for not meeting the contracted terms and then sell the distributors for their real market value, not for a price agreed upon by government negotiators. Diario Libre had reported that its sources indicated that Hernani Salazar, one of the key promoters of the re-election of President Hipólito Mejía, played key role in the negotiations. The money will be paid to the Spanish company over a 12 year period from revenues generated by the Union Fenosa affiliate, Distribuidora Dominicana de Electricidad, that retains the right to Edenorte and Edesur derived income. For more on the Union Fenosa press release on the deal, see http://www.salacomunicacion.unionfenosa.es/nota.html?id=13139 In addition to Didoel, Union Fenosa keeps its power generation plants in the DR (La Vega and Palamara) that operate at hefty profits thanks to the fixed prices negotiated as part of the Madrid Accord signed during the Mejía government. Moreno said that the Union Fenosa violated the law when installing generators here and registering them as property of the mother company. The company was also granted a concession to install a 200 megawatt alternative energy plant in Puerto Plata. Commenting on the deal for El Caribe, Julián Nebreda of AES, the other power distributor company, said that energy sector problems are structural. He told Hoy newspaper that buying or selling a company is not going to change anything. To get to the bottom of the problem, a structural solution is needed. Namphy Rodríguez, news commentator for CDN Radio program 120 Minutes, alerted that the return of the company to the government comes right before an electoral period. He was concerned that for the months leading to the election, the government could subsidize the supply of power to gain votes in the May 2004 election, at a future cost to taxpayers. For more on the deal, see http://www.hoy.com.do/?module=displaystory&story_id=17448&format=html |
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No one now to blame Diario Libre’s Adriano Tejada reminds Dominicans that soon they will have no one to blame when the blackouts intensify again. The newspaper, in its back page commentary (De buena tinta) says that now that the government has retaken the management of the power distribution companies, those who do not want to pay for the service have gotten their godmother back. “The only thing we will now be sorry for is that we will no longer be able to blame the hateful Spaniards. Now Sauri’s kite will again be the one to carry our sorrows [he was referring to a former manager of the utility who blamed kits for power outages]. Oh yes, the politicians, the generals and the journalists will get their old conquest back – the right to not pay for the service. Diario Libre speculates that blackouts will not be reduced because the government has all protests under control. “From now on, the difficulties will be attributed to the so-called sacrifice the government has had to make to “purchase” the goods of Unión Fenosa. Likewise, the money they [Union Fenosa] never invested is being recognized with just a signature. If this is so, the Spaniards made a better deal today than during the days of the conquest and colonization. For comments, write to atejada@tricom.net |
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5% tax produces less than expected El Caribe newspaper reports that the 5% tax on goods and services produced RD$100 million in its first month of implementation. The government had expected RD$600 million. Business spokesman Celso Marranzini said that only goods exporters have been paying the tax, and not all. Hoteliers announced they would not pay the tax until the Supreme Court ruled on its legality, and free zones have found ways around it. Marranzini said that nevertheless the tax has had a chilling effect on exports. The government recently announced exports to Haiti would be exempt from the tax. |
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Bear Stearns update on DR Bear Stearns has issued an economic update based on economic data from the Central Bank. Bear Stearns points out that accumulated inflation for the first eight months is 24.6%, with projections for 35% inflation for the year as a whole. But says that inflation is expected to trend down, as it has been doing since June. The good news is that foreign tourist arrivals rose by 31.7% year over year in August, for the total year-to-date improvement to be over 2002 to 22.4%. Increased tourist arrivals led tourism revenues to expand by 18% in the first half of the year. Likewise, the flow of remittances expanded by 6.5% from the same period of last year. As a result of higher exports and lower imports, the current account showed a surplus of US$464 million in the first half of the year, compared to a US$309-million deficit last year. For the report, see http://www.dr1.com/news/2003/091203_BS.pdf (PDF) |
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Fire at Baninter The defense bar of former Baninter president, Ramón Báez Figueroa demanded from the government an investigation into the fire that occurred on the fifth floor offices of the bank headquarters. The fire occurred around 5:40 am in the morning. Bank records are kept on that floor. Computers were reported damaged. Lawyer Marino Vinicio (Vincho) Castillo, called the press conference to demand an explanation as to why people from the District Attorney’s office were at the bank instead of Judge Eduardo Sanchez, who legally empowered with the case. Castillo demanded a full investigation on the fire that occurs right at the moment when they are presenting documents showing how the PPH faction of the PRD has received Baninter financing. Recently, National Treasurer Pastora Mendez admitted to RD$30 million in funding from the bank for the 2002 congressional and municipal elections after proof of the operation was presented. Radio and TV news commentators speculated all day on the suspicious nature of the fire. Rumors have circulated of the existence of receipts that would prove the financing. |
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Politicians protest political army chief Spokesman for the PLD in the Chamber of Deputies, Teodoro Ursino Reyes demanded that the government replace the Chief of the Army, Major General Radhames Zorrilla Ozuna who is openly on the campaign trail for the re-election of President Hipólito Mejía. “We ask the President, who should be committed to demanding respect for the laws, to replace Mayor General Zorrilla Ozuna for the damage that he is doing to the institution he directs,” said Ursino Reyes. The Dominican Constitution bans the military from partisan political activities. Ursino Reyes said that if the general “wants to do politics in favor of the President, he should resign and register in the PPH, because his statements are a mortal blow to the Constitution. Ovi Saldivar, a former spokesman for the PRD in the Chamber of Deputies, also commented that the fact that a chief of the army is into politics is an affront to the freedom and institutions of the country. “It looks like we have gone back 30 years to the time when the military would show off their guns that carried the flag of Balaguer [a former caudillo and President] on the streets while committing all kinds of upsets against our party, the PRD,” said Saldivar. “This is shameful; the PRD would criticize Pérez y Pérez and other military that campaigned for Balaguer, so now we cannot permit this to be happening again,” said PRD deputy Jorge Frías. Spokesman for the PRSC, Luis Emilio Reyes Ozuna also agreed the military should stay out of politics. “It is a serious matter because the military should be in their barracks; this had been overcome and democracy should continue to strengthen,” he said as reported in El Caribe. |
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More funds for legislators El Caribe reports while reviewing modifications to the National Budget requested by the Executive Branch, the senators went ahead to transfer RD$20 million to themselves. The Executive Branch had requested the permission to make transfers and reshuffle allotments in the national budget for RD$1.8 billion. The bill sent by the President’s office did not include allotments for the legislators, but the senators passed the bill dealing out RD$10 million to themselves and RD$10 million to the deputies. The bill moves on to the Chamber of Deputies for approval. The only vote against the transfers in the Senate was that of PLD senator Jose Tomas Perez who complained of the lack of transparency in the fund transfers of a large chunk of governmental funds to be handled instead by the Presidency. |
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Senate backs x ray system in ports The Senate authorized the Ministry of Armed Forces to sign with a Dominican company only identified as I.C.S.S.I.S.A. and authorize the installation and operation of an x ray systems in ports. Exporters and importers would be obliged to use the service. The bill passes on to the Chamber of Deputies. The system has been firmly rejected by the private sector as contributing nothing but problems to trade. |
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Agua Crystal denies shut down Agua Crystal was not closed nor is in legal case with its neighbors, as per a press release that circulated in the press yesterday. The company responded to the bad press with a 3x2 offer at several points of sale. Board members Monica Armenteros, Francisco Cupello and Victor Bencosme said that the company has been implementing Ministry of Environment recommendations to reduce noise contamination. Monica Armenteros says the main problem that continues is the noise generated when the distribution trucks leave the company at 6 am. She said that the power plant, workshop and loudspeakers previously used were eliminated to keep good relations with the neighbors. |
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Olympic Stadium patronage President Hipólito Mejía announced the first patronage that would manage the legacy of the Pan American Games in sports installations. Businessman Jose León Ascencio will head the board. Presidente Beer is in charge of the next major event to be held at the stadium, the Presidente Latin Music Festival, scheduled for 17-19 October. Decree 898-03 appoints Jose Leon, president-treasurer of the Grupo E. León Jimenes (Presidente Beer and Marlboro cigarettes) as president of the board. Other members are Sports Minister Cesar Cedeño (first vice president), Public Works Minister Miguel Vargas Maldonado (second vicepresident), Administrative Secretary of the Presidency Alberto Atallah (third vice president). The board is created for 10 years. |
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Keep a close eye on Isabel Weather forecasters continue to show Isabel passing north of the Dominican Republic. Just how far north is still uncertain. Thus, the storm should continue to be closely monitored, given its diameter of about 700 miles. As of the 11 am AST the National Hurricane Center moved the official track further south. The National Hurricane Center forecasters dropped 2 degrees of latitude from the track crossing at 70W in 24 hours, or 24.5N (down from 26.5). The current official position puts the eye about 350 miles off the coast. Residents in the north coast of the Dominican Republic should be aware that precautions need to be taken if it turns any further south. As of the 11 am report on Friday, Isabel continues to be a category 5 hurricane with sustained wind speeds of 260kph (160mph). Wind gusts are reaching 315kph (195mph). The report states that the hurricane was centered at 21.6N and 57.8W or approximately 1,210km (752 miles) east-northeast of the Samana peninsula. The storm has slowed somewhat and has been moving mostly due west for the last forty-eight hours at just 15kph (9mph). The latest forecast is for the center of Isabel to pass 525km (325mi) north of Sosua. At this distance the heaviest squalls and strongest winds would remain just offshore. However, large, long ocean swells will be affecting the north coast beaches beginning this weekend. Small craft and high surf advisories have been posted for Puerto Rico and its nearby surrounding islands. Check DR1 Hurricane Watch Forum often for updates as Hurricane Isabel approaches. See, http://dr1.com/forums/forumdisplay.php?s=&forumid=34, for the latest comments and discussion from the resident DR1 weather experts. |
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