Electricity sector expert Bernardo Castellanos says if the Senate approves the bill that creates the Punta Catalina Trust the country will be paying several times over the present cost of the operation of the plant. He strongly advocates against passing the bill that already was approved in the Chamber of Deputies. The Ministry of Energy and Mines is backing the draft that would create the Punta Catalina Trust to manage the 752 MW Punta Catalina plant.
The plant, the largest in the country, was built by a consortium led by the highly questioned Brazilian firm, Odebrecht. During the investigation of the US$92 million Odebrecht bribes scandal, the attorney general office did not investigate Punta Catalina. Now, the Ministry of Energy & Mines is proposing a trust that would grant the its new trustees full secrecy and control in operations for the next 30 years at a high cost to taxpayers in intermediation costs and with the likely employment of hundreds receiving high-level wages.
Castellanos is on a media campaign to explain that the country has little to gain and lots to lose with the proposed trust. He says that the present structure is already acting as the trust but is now accountable to the Ministry of Hacienda, the Comptroller’s Office, the Chamber of Accounts, the Procurement Agency and the Ethics Department of the Government, the country’s control agencies. The contract that has already passed in the Chamber of Deputies would relinquish the operation from this control and establish full secrecy to the Punta Catalina Trust.
Castellanos says the contract establishes instead of the government carrying out these services, the Trust would charge 1%-3% of the sales. At the present level, this would mean at least US$50 million in fees that at present are not being charged by the Ministry of Hacienda for the same service.
The contract establishes that a professional management would be hired, as is already in place at present, but a super structure, the Technical Committee is created. Since the members are private persons, they would not fall under the anti-corruption controls of the government. The members of the committee have already been named by Presidential decree.
In an interview with La Cuestion, Castellanos said that in 2010, today minister of Energy & Mines Antonio Almonte had blasted the management of the Public Electricity Corporation then under Celso Marranzini, criticizing the exercise for an increase in the bureaucracy. Celso Marranzini is named by decree to preside the all-powerful Technical Committee. Moreso, Castellanos observes that George Reynoso Núñez, another named member of the committee, was advisor to the former Minister of Hacienda, and a lead advocate for the privatization of Punta Catalina during the past government.
Castellanos warns that the contract establishes the new figure of adhering trustee, a figure that is enabled to carry out private investments in the trust. There is no limit to the investments that can be carried out. Castellanos warns that the investments do not have to be made public because the contract grants secrecy of the operations carried out.
Castellanos is also critical the government has not received the financial audit of the power plants and is prematurely negotiating its transfer of the operations, administrative and commercial operations.
Castellanos observes that while the government insists that the Punta Catalina Trust will be government-owned, he points out that the new Punta Catalina Trust has been assigned an RNC, or taxpayer number, and has been registered in the Santo Domingo Chamber of Commerce. He says a government trust enacted by the Medina administration, the RDVial was not given this treatment because it is a true government entity, not so the new Punta Catalina Trust.
Meanwhile, lawyer Trajano Vidal Potentini of the Foundation for Justice and Transparency (FJT) regretted that the deputies fast-tracked the contract. Diario Libre reports of the vote of the Dominican Liberation Party deputies for the approval of the new Punta Catalina Trust. Punta Catalina was the largest public work constructed during the Danilo Medina administration.
Vidal Potentini said the contract is full of inconsistencies and violations of the Dominican Constitution. He summed it up as the privatization of an asset that has cost taxpayers more than US$3 billion. He said the Fiduciaria BanReservas is given a “decorative” role in the contract.
He says the Technical Committee could decide to create a different trust outside of the initial governmental Fiduciaria BanReservas, and the contract enables this to happen, as the Technical Committee has full control and secrecy in its dealings.
“It is a technical committee composed of 5 people, headed by Celso Marranzini, which would be during those 30 years in a position to sell all the assets, without going through the transparency laws,” he said.
He expressed that what is being done is worse than a privatization and is rather a gift of all the assets of Punta Catalina including the two plants, since there has not been a technical audit, and these are valued at US$2.34 billion, in addition to the fact that the government is giving them US$1 million and RD$100 million to the Technical Committee to start their operations.
He considered that the Energy and Mines Minister Antonio Almonte, as he is not a lawyer, lacks a deep analysis of the voluminous fiduciary scheme contract and unfortunately has been badly advised.
Diario Libre reports on the vote of the Dominican Liberation Party deputies for the approval of the new Punta Catalina Trust. It is yet to be seen if the past high government officers of the PLD administrations that are now under investigation for corruption in government could be relieved from facing justice for their involvement in Punta Catalina construction if the Punta Catalina Trust contract is passed as approved in the Chamber of Deputies. The Attorney General Office has yet to present charges of corruption regarding the Punta Catalina power plant construction.
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18 January 2022