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Daily News - Tuesday, 22 July 2008

Fernandez and Light Bulb Program
Last night President Leonel Fernandez was present at a formal ceremony marking the start of the low consumption light bulb program (PSB), which will replace 10 million high-consumption bulbs with 10 million low-consumption bulbs. The government has already distributed low-consumption bulbs in low income barrios in the past, but this time around the program got headlines.
The effort was included in the President's energy saving measures, announced in his address to the nation last week. To start with, three million 18-watt and seven million 14-watt bulbs are available for areas under the Blackout Reduction Program (PRA), primarily low-income neighborhoods with fixed electricity bills. An additional seven million bulbs will be distributed later to areas where EdeSur, EdeEste and EdeNorte are in charge of billing for power. The Cuban-manufactured bulbs were purchased for US$18.5 million, but according to State-run Electricity Companies (CDEEE) vice president Radhames Segura, who is in charge of the program, the investment will be recouped in five months. According to Fernandez, the bulbs will save the nation US$13,401,699 during the first year and an estimated US$31 million in the second year.
The ceremony took place at the CDEEE headquarters. Hoy writes that the actual program begins tomorrow when a 1,000-man brigade will visit homes to replace the high-consumption bulbs. Segura said that 840,000 families who live in Blackout Reduction Program (PRA) areas will directly benefit from the program. Segura also said that in total, users will save an estimated RD$2 billion yearly with their new bulbs.

Energy subsidy limited
Economy, Planning and Development Minister Temistocles Montas has warned that the government will subsidize the energy sector only up to US$900 million, which is already US$250 million above what was budgeted for all of 2008. Montas says this means electricity rates might have to be readjusted.
Other sectors say that the energy service is padded with unnecessary labor costs and other costs that could be cut if there was political will. This would be an alternative to a raise in tariffs. Others say that more efforts and efficiency by power distributors to collect for power served would also make it unnecessary to increase the already high cost of service paid by those who pay for the service.
Montas, quoted in Hoy, defended the government's position and explained that the increase in energy subsidies greatly affects the nation's finances and urged energy officials to review the situation and accept that the government will not be able to give them all the money they need.
As a consequence of the rising cost of fuel, consumers have been suffering prolonged blackouts. The government has not been paying the generators the differential in fuel costs to keep the plants running.

Government to renegotiate
State-run Electricity Companies (CDEEE) vice president Radhames Segura says that the government will once again be trying to renegotiate several energy contracts. The goal is to save the government US$200 million annually. Segura said that the agreements are unfair, despite being legal, adding that the government would try to renegotiate the distortions in the Madrid Accord, Cogentrix and Smith Enron agreements in pursuit of savings to help tackle the rising electricity costs.

Nuclear energy could be costly
If the DR ever decides to install a nuclear reactor, the government would have to invest US$4 billion, according to Rafael Cuello, director of Nuclear Issues at the National Energy Commission. Cuello touted the cost efficiency of nuclear energy saying that users pay US$0.05 per KW of energy while Dominicans pay US$0.21 per KW of energy derived from fossil fuels. Cuello admits that although nuclear energy is a cleaner and more efficient energy source, it could be another 20 years before the country has nuclear energy capabilities. Cuello also said that the risk of catastrophic disasters is minimal as long as officials follow security protocols.

Government gives cartel hope
The cartel of tanker owners, the Petroleum Tanker Transporters Union (SACPTA) that for more than 40 years has had a monopoly on transporting fuel to Texaco stations in the DR, is again counting on the government to come through for them. The Fernandez administration gave them hope yesterday when it asked its Legal Advisory Department to study the legalities of the SACPTA request before the President takes a stand or intervenes.
The announcement comes after a San Cristobal court ruled that their blockade impeding Chevron Caribbean-selected tankers from loading fuel from the Dominican Petroleum Refinery is in violation of Dominican laws and established a RD$100,000 penalty for each day that the blockade continues. SACTPA announced that it would be appealing to the Supreme Court.
As reported by Diario Libre, yesterday the cartel's authorities met with President Leonel Fernandez at the Presidential Palace to push their position of keeping their monopoly. The newspaper reports that following the meeting, Vice President Rafael Alburquerque, recognized as one of the nation's leading labor crisis mediators, requested legal advice on the grounds that the transport of fuel is a vital service and as such the government could step in to regulate who can transport the fuel.
Chevron Caribbean argues that Dominican law stipulates that companies are free to choose who will transport their cargo and that this is a case of business interests. They point to articles in the DR-CAFTA trade agreement and World Trade Organization rules, as well as to the Dominican Constitution to support their stance. Chevron says that SACTPA has decided to take the law into its own hands.
Meanwhile, Homero Figueroa, writing in Diario Libre, comments today that "principles guide decisions." He continues: "The government is trapped in an absence of firm principles. By being concerned solely with its popularity, when it comes to social conflict, the government finds it hard to make fair decisions. Governments, no matter how good they are, cannot please everyone. The principle that should rule all decisions is the defense of the general interest above individual interests".

Government ignores 2007 Austerity Law
In January 2007, Law 496-06 on Austerity in the Public Sector, which sought to curtail superfluous spending in government, went into effect. The law was passed concurrently with the passing of the 2006 Fiscal Reform that considerably increased taxes and government revenues. But, while the government did benefit from a windfall in additional income, official figures show that the austerity law did little to restrain unnecessary spending, as reported in Diario Libre. A report released by the Chamber of Accounts, the government body in charge of auditing government departments, indicates that government employees were paid RD$45.75 billion, when the National Budget had authorized RD$42.99 billion. Wages for government employees were up 6.4% in 2007, or RD$2.8 billion more. And the chapter for per diem and representation expenses was up a considerable 24.2%, going from the authorized RD$489.3 million to RD$607.9 million, or RD$118.6 million more. Propaganda spending was up a whopping 98.1%, or RD$1.05 billion more than what was authorized. The government is a monopoly in most of the services it advertises, which makes spending in this chapter highly questionable. Article 12 of the Austerity Law had ordered a 25% reduction over what was spent on advertising in 2005. The government also spent RD$808.5 million on the chapter for Communication Services, or RD$808.5 million. This was in line with what had been authorized.

Valentin on clientelism
Chamber of Deputies President Julio Cesar Valentin is repeating his criticism of the culture of clientelism in the DR, saying that it weakens government institutions. Valentin said that this culture is prevalent in the ruling PLD party, of which he is a member. He says that if the culture of political patronage continues it will divide the public on the issue of politics. He added that he is a critic of this system, of which all citizens are victims. He says the DR can't achieve its developmental goals without strengthening its institutions.

Global Solidarity Fund
Speaking at the United Nations yesterday, Dominican Foreign Minister Carlos Morales Troncoso proposed the creation of a Global Solidarity Fund with contributions from oil-producing countries. The Fund would enable oil producers to help poorer nations by contributing a portion of their earnings towards compensating developing countries for the high international fuel prices. The initiative, which was devised by President Leonel Fernandez, suggests that 57 countries with per capita incomes no higher than US$6,000 should have access to a special fund, worth US$40 billion. Representatives from Jamaica, El Salvador and Guatemala voiced their support for the initiative while Iranian, Algerian and Venezuelan representatives were less enthusiastic.

Car sales down
The Association of Automobile Concessionaires (Acofave) says that new car sales during May and June were among the lowest in recent years. Enrique Fernandez, executive director of the organization, says that people are opting instead to buy used cars. According to Customs Department (DGA) statistics, new car imports totaled 28% of total vehicle imports. Fernandez attributed the decline in sales to rising intereset rates. He said financing of vehicles jumped from 15 to 25% after the May election.

Taiwan donates scholarships
Taiwanese Ambassador to the DR, Isaac Tsai, will donate US$1 million to the Ministry of Higher Education (SEESCYT) on behalf of his country. The funds will be used to help Dominican university students. The Taiwanese Embassy announced that this is the ninth set of funds awarded as part of their Mandarin Language and International Scholarship Fund Program. According to the SEESCYT, the fund will provide Dominican students with the opportunity to study Internet technology, medicine, bio-chemistry, economics, foreign trade, banking and markets and rights and integrated communication at universities abroad. The funds will also be used to employ two Taiwanese teachers to teach languages at the UASD University and at the Foreign Relations Ministry's School of Diplomacy.

No jail for Vivian Lubrano
Former Baninter executive Vivian Lubrano was not admitted to Najayo women's jail because prison doctors said they did not have the facilities to handle a woman in her state of health. El Caribe reports that Lubrano has been hospitalized at the Abel Gonzalez Clinic since she was sentenced to five years in prison for her involvement in the Baninter banking scandal. Yesterday, Lubrano arrived at the Ciudad Nueva courthouse in an ambulance and was ordered to be transferred to Najayo in San Cristobal by Judge Saulo Ysabel Diaz. Once she arrived at Najayo, the prison doctor sent her back to the Abel Gonzalez Clinic. Lubrano's doctors are now asking for her to be placed under house arrest because of the state of her health.
Judge Saulo Ysabel Diaz had requested a medical evaluation before ordering her transfer to Najayo. Dr. Ernesto Dotel, who carried out the examination, said that she was suffering from panic attacks. Nonetheless, he said that Lubrano's health was stable and that she could be medicated and would recover in jail. Lubrano is supposed to serve her prison sentence at the Najayo Women's Correction and Rehabilitation Center until 22 March 2013.

Big Red Machine coming
The Big Red Machine, the powerful Cincinnati Reds team that dominated baseball during the 1970s will be in the DR in November following an official invitation by President Leonel Fernandez. Sports Minister Felipe Jay Payano made the announcement saying that he had spoken personally with members of the famed team during the Hall of Fame induction ceremony for Cesarin Geronimo. Geronimo was inducted into the Cincinnati Hall of Fame on Saturday. Payano confirmed that Johnny Bench, George Foster, Ken Griffey Sr., Tany Perez, David Concepcion, GaryNola and Joe Morgan have accepted the invitation. The group said it would be an honor to visit the country, commenting that it would be a great excuse to play golf at the famous course in Cap Cana. The Big Red Machine was very popular in the DR as many Dominicans watched Geronimo play during the 70s.

Tuesday Sales
Jumbo is advertising potatoes for RD$11.95lb, carrots for RD$4.95lb, red onions for RD$6.95lb, red apples for RD$26.95lb, yuca for RD$19.95lb, fresh corn for RD$9.95lb, and Keith mangos for RD$6.50ea.
Carrefour is offering specials in its meat and seafood department, with Australian lamb chops for RD$144.95lb, premium ground beef for RD$64.95lb, beef fillet for RD$169.95lb, select ground beef for RD$42.95lb, and chicken thighs for RD$34.95lb.
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