Belize Government takes back its telephone Corp. Hubert selling ours

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u3_deaninhouse<<< Prime Minister Dean Barrow made the following remarks to Parliament, and the Bahamas Press, recognizing the historic and national significance of the move, has decided to publish Barrows remarks verbatim…

We hope a PLP government would STOP, REVIEW, CANCEL AND RESCIND any silly contract entered into by the Ingraham Government on BTC.

Mr. Speaker,

I rise to introduce the Bill for an Act to amend the Belize Telecommunications Act to provide for assumption of control over telecommunications by the Government in the public interest; and to provide for matters connected therewith or incidental thereto.

Let me at once say that the long title is quite clear and what the government is doing by way of introducing this measure, is preparing to take control of the company formerly known as Belize Telecommunications Limited, and currently going by the name of Telemedia.

I must also say immediately, Mr. Speaker, that government intends to take the Bill through all its stages today.  The Senate will then meet tomorrow, and we expect that the Bill will be signed into law by tomorrow evening or Wednesday morning at the latest.  At that time the new, Government-appointed Board of Directors will assume operational control over Telemedia, and the re-Belizeanization of the company will be complete.

Now I confess, Mr. Speaker, that the Opposition, indeed all members of the House, are only seeing the Bill for the first time this morning.  And yet we intend to pass it today.  Members will thus have to read and digest quickly between the introduction and the resumption after committee meets, in order to debate the measure.  The lack of notice is regretted, but could not, in the circumstances, be helped.  The current owners of Telemedia, as they have repeatedly demonstrated, will stop at nothing to frustrate the business of governance in this country; and will act with every resource at their command to thwart the interest and legitimate aspirations of the Belizean people.  While the minimum requirements of our democracy means that there will still be a two day window of opportunity for those that would stymie us, government had to do what was necessary to narrow that opening as much as possible.  I say again to all members that I would have wished that we did not have to proceed in this fashion.  But the exigencies of the circumstances, the larger demands of Belize’s national interests, left us no choice.

The questions will of course be asked: why this move, and why now? In answering these questions I need to rehearse for the house and the nation a fair amount of background.  Mr. Speaker, Belize Telecommunications Limited was incorporated in 1987 during the first UDP administration.  At that time the purpose was to Belizeanize telecommunications, replacing the control of the foreign entity Cable and Wireless with a national company.  It was always the UDP government’s intention that the new BTL would be majority owned by the citizens of Belize, not by the government.  That first privatization worked wonderfully well and has remained one of the proudest accomplishments of the 84 – 89 UDP administration.  We made sure then to insert particular safeguards into the company’s Articles of Association to protect the national interest in BTL.  And history has recorded what a fabulous success story that whole enterprise was.  In the years immediately after 1987 BTL returned record profits to the many Belizeans that invested in the company.  A 20% return on investment was the order of the day, and there were years when BTL paid a dividend yield of as much as 30%.

All remained well until February 1992 when the predatory designs of one man were facilitated by the greed and hunger for cash of the then PUP administration.  At that time the PUP began to sell shares in BTL to Michael Ashcroft at a rate and in a manner that was counterintuitive and counter nationalistic.  Under the UDP Articles of Association there was a 25% cap on the shares that could be sold to any one person or entity.  This was so that no single individual could dominate the company and in order to make the ownership as widely Belizean as possible.  In violation of this Article, the PUP presided over an ever increasing transfer of shares to Ashcroft.  This process was interrupted by the 93-98 UDP return to power, but restarted as soon as the PUP became the government again.  It culminated in March 2004 with the infamous sting operation perpetrated by then Prime Minister Said Musa, which leveraged almost 94% of BTL shares into the control of Lord Ashcroft.  Since then the PUP double dealing in which they screwed Glenn Godfrey for Ashcroft, then Ashcroft for Prosser, then Prosser for Ashcroft again, has produced litigation after litigation.  Between 2005 and 2006 alone, there were at least 6 BTL cases in Belize, England, the US and Canada.  In the end Ashcroft prevailed and cemented his total control.

But, he was not satisfied.  Between 1998 and 2005 BTL’s profits were 20 cents for every dollar invested.  Nevertheless, and perhaps as payback for the PUP support, however fleeting, of Jeffrey Prosser, Ashcroft wanted more.  And he got it from the PUP in 2006 after he had regained supreme control of BTL.  This came by way of the infamous secret Accommodation  Agreement, in which the PUP government guaranteed the Ashcroft group a minimum rate of return of 15%. According to that Agreement and under that guarantee, Ashcroft could in any year declare that BTL had not made that 15%; declare how much the shortfall was; and simply not pay his taxes until the so-call shortfall had been recovered. This is exactly what happened in 2007, so that thereafter Ashcroft’s Telemedia ended up paying no business tax, no customs duties, no imprest of any kind.  In addition, the Accommodation Agreement stipulated that the PUC could not regulate Telemedia’s rates, leaving the consumers at their mercy.  But it still did not stop there.  All other existing Telecoms licenses (excepting Speednet’s – about which more later) had to be revoked.  Voice Over Internet Protocol, which we all know gives consumers the cheapest option, is outlawed.  Telemedia is able to refuse interconnection to any and everyone, including internet service providers.  And the PUC cannot, for any cause and no matter what the complaint, in any way touch or alter Telemedia’s license.  Finally, the Accommodation Agreement binds each government department, agency, or associated body, to use only Telemedia’s services at onerous pre-arranged rates until 2015, and thereafter for successive 3 year renewal periods.

Now, Mr. Speaker, this is where the new government of the United Democratic Party came in.  As soon as we discovered this Accommodation Agreement and the fact that it had been secretly signed and secretly implemented by the PUP, we came to the Belizean public and denounced it.  Lord Michael Ashcroft is an extremely powerful man.  His net worth may well be equal to Belize’s entire GDP. He is nobody to cross and the new government could well have chosen the path of least resistance; to cower in the face of the certain wrath of this potentate; to continue in the PUP style with business as usual; to betray, in other words, all that we had campaigned for, all that we had promised, and all that is basic and decent and straight forward if there is to be any ounce of trust left in public office.  But betrayal of the people is not in my nature, and not, I am surpassingly proud to say, in the nature of the United Democratic Party.

And so we took counsel among ourselves and to a man the UDP cabinet voted, in the name of the Belizean people, to resist this treasonous Accommodation Agreement at all costs.  Belizean Law and Belizean dignity would be upheld; Belizean pride and Belizean patriotism and Belizean patrimony vindicated.

And, of course, resisted we have.  Now no one can doubt the justice of our stand.  But, as we always knew, it has been costly.  Michael Ashcroft had Telemedia invoked arbitration in London to enforce the Accommodation Agreement.  And he obtained a judgment of 38.5 million dollars and a court – mandated requirement that government now begin to honor the Accommodation agreement.

Well, I have said that as God is my witness I will never pay that award.  But it doesn’t stop there.  In April of 2009 Telemedia informed the government of further claims they will make to the London Court of International Arbitration, and that the size of a new award “could pale the current award of 38 million into insignificance”.

Mr. Speaker, Members, fellow Belizeans:  this is intolerable.  I, and the United Democratic Party Government, in the name of the people will put up with it no longer.  That an agreement so patently illegal, so patently immoral, so patently anti-Belize, should continue to torture us, to bleed us, to subject us to this death by a thousand cuts, cannot for one second more be countenanced.  This is our House, this is our country.  Here we are masters, here we are sovereign.  And with the full weight of that sovereignty we must now put an end to this disrespect, to this chance taking, to this new age slavery.  There will thus be no more Telemedia awards against us; no more Telemedia court battles; no more debilitating waste of government’s energies and resources; and there will be no more suffering of this one man’s campaign to subjugate an entire nation to his will.  After long and sufficient consideration, therefore, and in the exercise of that national power that is ours by Constitution and inalienable right, this government will now acquire Telemedia.

Think on it Mr. Speaker.  Telecommunications uses the airwaves as its medium.  But these airwaves constitute a God-given natural resource of Belize, just like our sun, our sea, our rivers, our forests.  These things together  help to make up the patrimony of the Belizean people, and the exploitation of that patrimony must always be consistent with the interests of Belizeans.  When those that come to partner with us demonstrate beyond all doubt that they will upend equitability, upend reasonableness, that they will, infamy upon infamy, beat us about our heads with our own inheritance, the very blood coursing through  our Belizean veins obliges us to act.

Just as fundamental, though perhaps a little more prosaic, telecommunications – information and communications technology – is a critical part of the development apparatus of any modern society.  Indeed, as has been officially recognized by our regional integration movement CARICOM, it is an indispensable tool in that restructuring of developing countries’ economies that, in the face of the global crisis, must begin to take place now.  Accordingly, unregulated monopoly control and abuse of the sector cannot be permitted.  Yet, that is precisely what the Accommodation Agreement mandates.  This is especially so in view of the fact that even the very limited mobile phone so-called competitor to Telemedia, is owned by Telemedia.  That is right and I have the documents to prove it. 77.38% of Speednet is owned by three companies – Callerbar Limited, Riddermark Ventures Limited, and Heaver Holdings Limited.  These three companies are headquartered at the Belize City Cork Street premises of Michael Ashcroft, and controlled by two of the now notorious Trusts owned by Michael Ashcroft.

And so Mr. Speaker let no one be in any doubt as to why we are doing what we are doing today.  Let no one confuse or misunderstand our purpose.  This is not ideology, this is not triumphalism.  This is a country in particular circumstances reaching the end of its patience and doing a singular, necessary, righteous thing to protect its national interest.  It is not part of any pattern, part of no new philosophy.   It is plain and simple a special measure for a special case.  We make no apologies for it, but we also do not seek to elevate it. As must be clear from the developments in even the global bastions of super capitalism and private property, this is what countries do to protect themselves.  It is an article of faith and a cardinal rule of statecraft that a nation will act in any way necessary to preserve its national interest.  That national interest, in these circumstances, now absolutely demands our present course of action.

So there you have it, Mr. Speaker, the government’s brief from the heart.  In the days to come, the dissection and the deconstruction, both at home and abroad, will of course take place.  But no matter which way you look at it, ours is a straightforward case and a compelling case. We will move ahead not unaware of the difficulties that will be thrown up, but with a confidence that is both supreme and serene because we know we are right.

Before I conclude, just let me spend a little time telling you what will happen as we proceed.  First of all, you will see that the Bill makes every provision for fair and proper compensation to be paid to the owners of the shares we will acquire.  This is not, I repeat, some cowboy action but something done in the full plenitude of, and compliance with, our Constitution.  As well, we are only acquiring the 94% or so of Telemedia that is controlled by the Ashcroft interests.  The shareholding owned by Belizeans will be left intact.  The actual acquisition will be done by way of an order made by the Minister of Tele communications, who will in that same order appoint a new Board of Directors. As soon as practicable after, an extraordinary general meeting will be held and new Articles of Association adopted.  The new Articles will essentially be the Articles of the successful BTL that was launched in 1988.  In other words, the safeguards to protect Belizean shareholders will be re-established, including protection of the special share and the limitation on the amount of single ownership. As well, and perhaps most importantly, the articles will guarantee that dividends will be paid to shareholders at the rate of 40% of the yearly profits.

Of course, a prospectus will as early as possible be published.  On this basis, Belizeans will be invited to purchase the shares now being acquired in Telemedia by the Government.  In other words, there is no intention for government to hold on to those shares.  This acquisition is, rather, to give all Belizeans a chance to invest once again in a company that has proven to be a money maker.

I also want to say that the new Board of Directors will be chaired by Mr. Nestor Vasquez and will have the Right Honorable Manuel Esquivel as a member. Telemedia’s current employees will, of course, all keep their jobs.  Indeed, we expect a greatly improved industrial relations climate and the quick resolution of outstanding worker grievances.  I think particularly of the arbitration case of the dismissed workers, a case the current ownership of Telemedia has utterly frustrated.  I am positive, therefore, that Telemedia’s staff, like all other right-thinking Belizeans, will completely support the Government’s move and cooperate to make the transition as seamless as possible.  For consumers, we expect services to continue uninterrupted.  u3_ashcroft3We do not believe the present operators of the company will try any kind of sabotage.  If they do, we will have to use already existing provisions of the law to move in and take control even before the passage of this Bill.

Mr. Speaker, I close by saying that no one need feel any sympathy for Lord Ashcroft.  This is not an ad hominem move; it is to deal with a structural problem.  Indeed, apart from his compensation, Lord Ashcroft’s interests will remain profit-making participants in Belize’s Telecommunications sector, because those interests own Speednet, the other telecoms provider.  This, I repeat then, is only about Telemedia; and no more and no less than a case of the Belizean national interest trumping any other consideration.

Michael Ashcroft, majority shareholder of BTL.

  • Had BTC drop their cellphone rate to five cents or less a min the majority of bahamian would have supported them,but no they want charge people big price even Haiti would’ve give me a better deal.

  • Interesting reading. An admirable and gutsy move by PM Barrow. Respect due.

  • sell BTC fast its crap and unless its sold and or competition brought in we will continue to be the worst telco on this side of the world. I have seen what the other islands have to offer and BTC is dead last in technology. Bravo to the current government for not allowing selfish PLP like Bradley Roberts to continue to rob the Bahamian ppl

    • BTC sucks…what do you know about telecommunications, where have you travel and tell me please what survey have you taken to make such a statement. unlike many countries in the Caribbean, BTC job is much more difficult, we are a nation surrounded by water, BTC has spent millions of dollars in providing services to most of the islands and settlements. when you lose power to your home , having vontage, vibe , etc, you will lose your phone services, unless its a mobile phone. With BTC you still have a dial tone on your wire line. By all means BTC is not perfect, so if they suck cease the service, SRG/Cable-bahamas is offering phone service. But have some pride in the phone company that we all own collectively. We can make suggestions on how to make this company better. Do you think that the other islands will benefit from the sale of BTC. I hope you realize that your tax dollars over the years have contributed in making BTC a very good company to work for and to add to that, you already own the company. one suggestion is to tell the government to sell the majority shares to Bahamians and stop meddling in the affairs of BTC. BTC sent over 70 millions dollars to provide fiber connection to all the family island. with the infrastructure in place BTC was geared towards bringing voice, video and data to your door step. this was completed in 2006 and guess what government interference. I don’t feel the staff of BTC objects to being privatize, however, the company C&W is already a monopoly in the Caribbean.

  • LOL @ Your Journalistic Abilities!

    Still not using a password. You should fix your website.

  • media

    @LOL @ Your Journalistic Abilities!
    Ahhhhh see the DUMB DORA password worked!

    BP

  • LOL @ Your Journalistic Abilities!

    BTC should be sold. What have they done lately but rob people blindly by overcharging for land lines, internet and flooding the streets with card selling hooligans. That company could be way more profitable than the chump change it makes now. Bahamian people should expect more out of their telecommunications company.

    But then again you guys probably don’t mind the third world mentality that company has.

  • hardhead gal

    Ministers of government speak about privatisation as if it actually means something important. Many people will never look up the word in a dictionary to see what it actually means or study to see the effects of telecommunications privatisation in other countries. It’s only a big word used to deflect the fact that our country’s resources are being sold right under our noses. Many employees at BTC are qualified to do the same things the new owners will do only Bahamians will not profit from it. I say if you have to privatise, sell off 49% and retain the lions share for the benefit of the Public Treasury. And that minority sale should be to a reputable phone company like Altec suggests.

  • Altec

    bahngr :
    Our saving grace is likely that no one will acquire BTC. Vonage just announced that The Bahamas is now included in its new world plan with 59 other countries. This means that a Vonage phone in The Bahamas is a local phone with no long distance anywhere in The Bahamas and 59 other countries. While BTC is charging 18 cents per minute to call between islands, its free on Vonage. While BTC offers Vibe for 29.99 and Indigo has a similar rate calling throughout the Bahamas and a few other countries, Vonage has the entire Bahamas, including cell phones for 24.99
    In short, BTC has severe revenue challenges going forward and will more than likely not be able to face them effectively. The only portion of BTC which is worth buying is cellular and that may be at or close to market capacity.
    [Reply]

    Hey Bahngr, if Cable Bahamas was to buy BTC, guess what will be the first thing they do? BLOCK VONAGE. Thats what BTC did when it introduced VIBE. Those BTC subscribers who had Vonage, couldnt use it. i know cause i was one of them and then switched to Cable Bahamas.

    But in the end, BTC will have to be sold because the way technology is going, their revenue will drop over time as other cheaper means of telecommunication emerges. For example, email. Post offices all over the world only serves the purpose now of shipping bulk items. When was the last time you bought a stamp to mail a letter?

    If it is going to be sold i say sell it to AT&T or Verizon. Sell the company to an actual phone company that has the resources to upgrade and bring first class features. Why sell it to some fly by night, wannabe?

  • bahngr

    It was just pointed out to me that the same thing would probably happen here. The only difference is that Christie’s PLP would probably not say a word about it.

  • Thomas Finley

    kevin mckenzie :
    Bahamas Press you need to EXPOSE the CORRUPT practice at BEC,where a foreign company is CONTRACTED to perform overhauls on BEC generators.I will give you an example,a 35 mw generator is exported to be overhauled by this company on being shipped back to BEC after it was SUPPOSELY REPAIRED this 35mw generator can only produce 17-20 mw of electricity.Meanwhile BEC would have paid this company MILLIONS of dollars in fees.It must be noted that BEC has the BAHAMIAN EXPERTISE AND WORKERS who can do this work.These Bahamian workers ARE BEING PAID NOT TO DO ANY WORK WHILE THE REPAIRS OF THESE GENERATORS ARE OUTSOURCED TO FOREIGN WORKERS WHO ARE BEING PAID IN SOME CASES 4 TIMES THE YEARLY SALARY OF THE BAHAMIAN BEC’S EMPLOYEES WHO HAVE THE EXPERIENCE AND QUALIFICATION TO DO THE SAME WORK.IN ADDITION BEC HAS PURCHASED CARS AND PAID SCHOOL FEES FOR CHILDREN OF THESE FOREIGN EMPLOYEES.Now we know why the cost of electricity is so expensive in this country,Bahamians have to pay bec’s and this INEFFECTIVE FOREIGN COMPANY HUGE FEES.
    [Reply]

    This charge needs to be put to the Minister responsible, and I look forward to reading/hearing his response. Executives of Public Companies have been gaming the system for years whether giving contracts to local professionals for huge kickbacks, or their foreign counterparts. Can someone say sting operation?

  • Bahamas Press you need to EXPOSE the CORRUPT practice at BEC,where a foreign company is CONTRACTED to perform overhauls on BEC generators.I will give you an example,a 35 mw generator is exported to be overhauled by this company on being shipped back to BEC after it was SUPPOSELY REPAIRED this 35mw generator can only produce 17-20 mw of electricity.Meanwhile BEC would have paid this company MILLIONS of dollars in fees.It must be noted that BEC has the BAHAMIAN EXPERTISE AND WORKERS who can do this work.These Bahamian workers ARE BEING PAID NOT TO DO ANY WORK WHILE THE REPAIRS OF THESE GENERATORS ARE OUTSOURCED TO FOREIGN WORKERS WHO ARE BEING PAID IN SOME CASES 4 TIMES THE YEARLY SALARY OF THE BAHAMIAN BEC’S EMPLOYEES WHO HAVE THE EXPERIENCE AND QUALIFICATION TO DO THE SAME WORK.IN ADDITION BEC HAS PURCHASED CARS AND PAID SCHOOL FEES FOR CHILDREN OF THESE FOREIGN EMPLOYEES.Now we know why the cost of electricity is so expensive in this country,Bahamians have to pay bec’s and this INEFFECTIVE FOREIGN COMPANY HUGE FEES.

    • Until people realize it truly takes your own to destroy you, the blow will never get any easier. We gonna start at the top….Governments were actually designed to subdue the masses!!!! They are here to keep me and you begging at their feet!! So companies like these are there to help governments keep us in a deep, dark EMPTY hole!! Stay in prayer people its only gonna get WORSE!!

  • bahngr

    Our saving grace is likely that no one will acquire BTC. Vonage just announced that The Bahamas is now included in its new world plan with 59 other countries. This means that a Vonage phone in The Bahamas is a local phone with no long distance anywhere in The Bahamas and 59 other countries. While BTC is charging 18 cents per minute to call between islands, its free on Vonage. While BTC offers Vibe for 29.99 and Indigo has a similar rate calling throughout the Bahamas and a few other countries, Vonage has the entire Bahamas, including cell phones for 24.99

    In short, BTC has severe revenue challenges going forward and will more than likely not be able to face them effectively. The only portion of BTC which is worth buying is cellular and that may be at or close to market capacity.

  • media

    With the American government now taking over the Banking, Realestate, Automotive and soon Health Insurance sectors of the US economy, this STUPID INGRAHAM GOVERNMENT should be moving slowly not quickly towards privatization.

    What they should move quickly on is CRIME! But like many of the REAL issues they’re dragging their feet.

    Bahamas Press/Editor

  • This is EXACTLY the route mr.Ingraham should have taken in 1997 when he first proposed to privatise BATELCO.Mr.Ingraham should have sold shares to the Bahamian people and then allow competition to follow some five years later.However,it is CLEAR from both mr.Ingraham and Christie’s behaviour that they HAVE NO INTENTION TO EMPOWER US FINANCIALLY.Bahamians must also be told that a HUGE percantage of the profits of BTC will now be shipped overseas to the new owners of BTC thus GREATLY REDUCING OUR FOREIGN RESERVES.It must also be noted that this reserve has only increased due to our government increased BORROWING of foreign currency.

    • I hear so much about profits. The fact is that telephone companies record less and less profit every year. We should have sold our public corporations years ago. Not to one Mr. Ashcroft, who, thank God, did not get approval to purchase Ansbacher Bank last year! But to a reputable company plus a large number of Bahamian shareholders. The problem is not privatization, but proper laws and regulations and sufficient real competition.

  • Thomas Finley

    Very good reading. where is our Deane Barrow, and who will deliver us from the Villains who now occupy Parliament, and are running this country into the ground and providing no hope?