| Daily News - Thursday, 19 August 2004 |
Industry & Commerce Minister Francisco Javier Garcia said that in dispatching the 15 million gallons of propane gas import companies have in storage there will be a considerable improvement in the nation’s supply by Monday. He said the government would use part of a US$65-million line of credit for power (US$50 million) and propane gas (US$15 million) to resolve the most pressing payment problems. The minister announced next year’s enactment of certain mechanisms to prevent such shortages from happening again. He said that the government is currently allotting RD$8 billion a year to subsidize the cost of propane gas, which is used for cooking and transport, when six years ago, the same subsidies accounted for only RD$640 million. Meanwhile, the scarcities continued yesterday, with cars lined up at the few distributor companies that had product to sell, with most vendors closed for business.
Upon being sworn in as new director of the CDEEE and the Ede Norte and Ede Sur power distribution companies, Radhames Segura said that although the blackouts would continue, he expected them to be of much shorter duration. Already, the power outages have abated considerably from the 20-hour electricity-free periods experienced during the final weeks of the past government, providing relief to citizens and businesses alike.
Segura said that the government would implement the 10 proposals presented by President Leonel Fernandez during his 16 August address.
Diario Libre reports that some 1,200 megawatts were available yesterday, of a demand of 1,600 megawatts.
This is up 30% since the blackout crisis peaked.
AES Dominicana announced that it expected the arrival of a shipment of natural gas on Monday, so that AES Andres, generating 300 megawatts, and Los Mina V and VI, each providing 105 megawatts, could return to service, providing a total of 510 megawatts.
Jochi Vicente, a principal at Grant Thornton in the Dominican Republic, has presented an analysis of the Dominican power situation, concluding that there is a direct relation between the price of power as perceived by consumers and the level of losses in the sector. “At higher rates, there are more losses,” he explains. He says high prices create a vicious circle because they encourage fraud, which in turn causes increased losses for the power distributors, less invoiced collections and a reduced cash-flow at the companies, thus undermining their capacity to pay the generation companies. In his opinion, until there is acknowledgement that the power sector has gone bankrupt, the necessary actions cannot be taken.
The Grant Thornton proposal is that the rate to the user be no more than US$0.10 per kWh – a US$.046 reduction from the present rate. In Vicente’s opinion, sale-buy contracts need to be renegotiated and new power plants installed. He said that most power generated in the DR is done using technologies that entail high production costs and that 85% of the power sold is at a fixed cost. Only 15% is sold at competitive market prices.
In Vicente’s view, if contracts are not renegotiated – even if efficient power producing plants are installed – the fixed-price contracts will impede the transfer of any savings on to consumers. He proposes a toll of US$0.01 per kWh for a 30-year term to compensate the power companies for the restructuring of their contracts.
Read the full proposal in Spanish at http://dr1.com/news/2004/081904_grantthornton.pdf
The rising price of petroleum could make the course towards economic recovery in the Dominican Republic very difficult. Hoy newspaper reports that the price of a barrel of petroleum on world markets has peaked at US$47.45. The Dominican government is aiming to get Venezuela to increase its supply of petroleum to the DR at the below-market prices accorded under the San Jose Agreement.
The Fernandez administration will be divided into three bodies — economic, social and institutional. As reported in Hoy newspaper Presidential Secretary Danilo Medina said that in grouping the cabinet into these three areas, the government departments should run more efficiently.
President Leonel Fernandez has appointed the National District prosecutors, naming Jose Manuel Hernandez to the National District, Perfecto Acosta to the province of Santo Domingo and Leonel Sosa as the prosecutor for the Court of Appeals of Santo Domingo.
Yesterday, Fernandez appointed Jose Francisco Pena Guaba as director of the Institute of Price Stabilization (INESPRE), the food distribution program.
Norge Botello, the former Minister of Police & the Interior during Fernandez’s previous government, was appointed as director of the Civil Aviation Board, with the rank of minister.
Alejandro Moscoso Segarra was appointed Commissioner for Support to the Reform and Modernization of Justice.
The Army’s Lieutenant Colonel Daniel Martinez Lorenzo was chosen to direct the Tourism Police (Politur) with the rank of general.
Emigdio Sosa was appointed as deputy administrative secretary of the Presidency, in charge of the Presidential Plan against Poverty.
Several deputy ministers were appointed at the Ministry of Agriculture: Alexis Camilo (administrative and financial), Leandro Mercedes (Research and Training), Luis Ramon Rodriguez (Farm Planning), Luis Yanguela (Farm Production) and Abraham Feliz Baez.
Two more deputy ministers were appointed at the Public Works Ministry: Emilio Florentino (administrative) and Carlos Polibio Michel Presbot (construction).
Fernando Caceres was appointed as deputy minister of Sports and Octavio Ramirez, deputy minister of Industry & Commerce.
President Leonel Fernandez appointed Luis Inchausti, formerly of the controversial PEME program, as a government minister sans portfolio. At the end of the previous PLD government, Inchausti was jailed for his involvement in the program that handled RD$1.3 billion without adequate controls. Fernandez justified the welfare program as a decision “to pay or to kill,” meaning the funds were used to bribe aggressive people in the slum barrios not to participate in several times violate protests or instigate civil unrest. In addition to Inchausti, Fernandez has also appointed others, who were questioned for the mishandling of funds, to top-ranking positions in his cabinet, including new Industry and Commerce Minister Francisco Javier Garcia (formerly of the National Lottery), Simon Lizardo and Felix Bautista, who will repeat as Public Works Office Supervisor. Side by side with his announcement of austerity, President Fernandez also announced that former Public Works Minister Diandino Pena, who was in charge of mega-projects in his government, will head efforts to build the metro of Santo Domingo.
Former Vice-President Jaime David Fernandez explained to El Caribe newspaper why neither he nor his followers have been appointed to government seats. Fernandez, who aspired to the PLD presidential candidacy in 2000 and lost out to Danilo Medina, said that the inaugural of a new President is “like a wedding, and I am neither the one being honored, nor the groom.” He did lament that his followers were similarly excluded for the first apointments, but said that he would cooperate with President Fernandez and his cabinet from the outside. “It’s the PLD party, our party, of course.” He voiced his expectation that things would go well and said the government will have his support.
The tax reform bill goes back to square one, again, today. Alfredo Pacheco, the Chamber of Deputies president, said the bill would be studied by the deputies today and may be given priority so that it is approved immediately and passed on to the Senate, as reported in El Caribe. The legislation, which was compiled by PLD technicians using the drafts devised by the PRD administration, was reintroduced by Deputy Manuel Diaz of the PLD. It was originally sent to Congress by President Hipolito Mejia on 13 July, but expired after two legislative periods passed without obtaining its approval.
The media is lashing out against raising the tax on advertising from 6% to 27.6%, saying that the government has added on a 10% luxury tax, plus increases of the 6% ITBIS to 16%.
Former Vice-President Jacinto Peynado was buried yesterday at the Cristo Redentor Cemetery. At the Presidential Palace, President Leonel Fernandez and Vice-President Rafael Alburquerque stood guard. Also present at the Presidential Palace were figures such as composer Juan Luis Guerra and Baseball Hall of Farmer Juan Marichal. At the Cristo Redentor Cemetery the deceased politician was accorded military honors prior to his burial. El Caribe’s report on the ceremony notes that the leading figures of the PRSC party were not in attendance at the funeral. Peynado is survived by his widow, Margarita Alvarez, and his children Jacinto, Angela, Manuel and Laura.
The nation celebrated the point-by-point battle of the Dominican women’s volleyball team versus the United States, as televised yesterday from Athens. It was a stellar night for 25-year-old Milagros Cabral, who scored a match-record 21 points, piloting the team spirit that clinched the match.
As reported by the US Volleyball website, going into Wednesday’s match the Americans had won 24 of the 25 meetings between the two teams, with their only loss coming in five sets (21-25, 25-19, 25-21, 15-25, 7-15) on 7 June, 1999 during a friendly match in Colorado Springs, Colorado. The win yesterday was the first victory for the Dominican women’s team that now faces Cuba on Friday and Germany on Sunday. The Dominican women had lost earlier to the teams of Russia (17-25, 13-25, 16-25) and China (20-25, 16-25, 16-25), two of the world's toughest volleyball competitors. They defeated the US team 26-24, 22-25, 27-25, 23-25 and 19-17 in a 2-hour, 12-minute game.
For a report on the game, see http://www.usavolleyball.org/VolleyballNews/news.asp?id=820
Yesterday, Dominican table tennis player Lin Ju, who won his first four matches, succumbed to Hao Wang of China, the fourth-ranked table tennis player in the world. Judo competitor Jose Vicbart Geraldino lost his second encounter, after winning a first against an Andorran competitor.
The action continues in these Olympic Games with all eyes on the performance of weightlifter Wanda Rijo in the 75-kilogram category, and judo athlete Eugenio Vasquez in the 100-kilogram category.
To follow Dominican athletes in the Olympics, see
http://www.athens2004.com
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