Posted: Friday, September 20, 2019. 8:54 am CST.
By BBN Staff: The business community has condemned the Government of Belize’s (GOB)’s decision to create a National Gas Company (NGC) which has exclusive rights to import butane into Belize; however, Prime Minister Dean Barrow says that the company, being formed through an arrangement with the private sector is a “good deal.”
Under the arrangement, the private sector entities will make all the equity and debt investment, which some reports say are in the area of $50 million in exchange for an opportunity to recover their investment and turn a profit through tax exemptions. GOB gets 25 percent shares in the company from the outset and after 15 years full control of the company, it will be handed over to GOB.
“Without putting in any money any profits that will be made we will get our share and at the end of this period its just handed back over back to the government, it struck me as a good deal and it still does so strike me,” Barrow said.
He noted that the current butane providers, who all stand to suffer substantial losses, are if not on board, interested in working with the company in terms of the procurement of the LPG and freight charges that are reasonable by way of getting the product to the port in Blue Creek.
Meanwhile, the Belize Business Bureau (BBB) has categorized the idea as the “worst idea of this decade,” saying that establishing the company will: lessen consumer options, have a negative impact on the unemployment rate by forcing butane importers to close down and send their employees home; make Belize less attractive to investors due to the type of policies that GOB implements, and have adverse effects on Belize socioeconomic makeup.
GOB decided to establish the NGC following a situation back in 2018 where the three importers of butane in the country, Gas Tomza, Belize Western Energy Limited, and Z Gas, negotiated with GOB for an increase in the price of butane by threatening to disrupt the supply of butane countrywide if the increase was not granted.
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