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The Prime Minister refused - and with that BEL seems to have no other choice than to simply throw in the towel. That's why the Prime Minister today told us he has had to decide to intervene dramatically, which begins with asking Fortis, the Canadian investor which owns BEL, how much it wants for the company:…

Hon. Dean Barrow, Prime Minister
"Upshot of the meeting is that I've asked Lynn Young to convey to his principals - to FORTIS, the government's interest in buying BEL. That's the upshot of the meeting."

Jules Vasquez
"You are asking them to name a price?"

Hon. Dean Barrow, Prime Minister
"To first of all indicate whether they are interested in selling and thereafter to enter negotiations with the government to try and realize a sale."

Jules Vasquez
"Is there no other way forward?"

Hon. Dean Barrow, Prime Minister
"Well that's precisely the point. Before we got to that stage Mr. Young and I talked about various options. Mr. Young conceded that the company is simply unable to go forward at this juncture. Bottom line is that none of the options for a possible resolution of BEL's financial crisis was palatable to the government. There is no way we can do what has been suggested in terms of simply fixing a rate without any reference to the regulatory framework and to the formula that's there. There is no way we can give a letter of comfort that would say short of doing what was being asked first that somehow we will ensure that things progress until they reach a point where BEL can get the sort of rate increase that according to Mr. Young the banks will need to be assured of. There is no way that as was another suggestion government will agree to borrow money - saddle the Belizean tax payers with another degree of indebtedness to put into a company that it does not control. I am convinced that we have reached the end of the road with FORTIS where the current arrangements are concerned. I don't want to prejudice the possible negotiations. I don't want to pour any scorn on FORTIS, to burn any fire on FORTIS but obviously there is no way we can take this any further. They feel that the regulator is against them; I get the sense they feel the courts of this country are against them. They have pretty much won three out of four in terms of whenever there has been litigation between them and the PUC but they lost the last one and all of a sudden that means that the courts are against them. If however how wrongheaded that is. If they have that sort of conviction fixed firmly in their minds, I don't see how we can proceed. So I really think we reach the end of the road but surely we can at least take a stab at trying to disengage in an amicable way. If terms can't be worked out or if FORTIS sends back - Mr. Young to say that we are not interested in selling to you - then of course government would have to at that juncture go to plan B."

Jules Vasquez
"Well I know you don't want to show your cards but the way things are going plan B would necessarily have to be kind of take over."

Hon. Dean Barrow, Prime Minister
"Well the truth is that is was Lynn Young who last week said that government needs to sort this out or take back the company. I am accepting him at his word. I imagine that when he said that, he was speaking for FORTIS. Government can't sort it out along the lines that Mr. Young is saying that FORTIS wants to see occur. In other words as I said, government cannot go borrow money; government cannot give them a blank check in terms of a rate review and government cannot go borrow money to put into a company over which it has no control especially since, whether rightly or wrongly, there is a tremendous degree of public suspicion, public distrust where BEL and FORTIS are concerned whether rightly or wrongly. In that context it makes it politically and practically impossible for me to go and borrow that sort of money they are talking about in order to hand across to BEL. So as I said, let me repeat, I think, really the current arrangements can no longer work and I would hope that FORTIS would in fact accept this. It is my sense that FORTIS already knows this. If BEL can't go forward then you are talking about a collapse and you are talking about the drying up of the energy sources for this country. The government cannot allow that to happen. It does appear that the way to prevent it is for government to regain control of the company. We really would want that control to be acquired as a consequence of an amicable discussion and successful negotiation with FORTIS. But if that can't take place, we have as I said maybe 20-30 days at the most and then to do whatever else is necessary to avert this collapse. I need to stress that a collapse is imminent and there is no way any responsible government can play around with that sort of eventuality."

Jules Vasquez
"So my next question would have been if the government can afford to do it to: A) take on another asset and B) take on all the myriad entanglements - perhaps legal entanglements -that may accompany such a takeover or acquisition but as you are saying it - it can't afford not to."

Hon. Dean Barrow, Prime Minister
"That's my short answer. There is no choice. If FORTIS is prepared to enter into negotiations - a great deal will depend on the sort of bargain they will seek to drive - we will get our own valuation - hopefully we will have access to the company for purposes of due diligence, assuming again FORTIS may well say do what you want and how you want, we are not prepared to talk to you. But if that does not turn out to be the case and they are willing to negotiate, we will have to get a proper valuation. We will have to see how we can come up with whatever money appears to be fair. But ultimately I do know this - Belizeans can return that company to profitability. Belizeans can run that company in the interest of Belizeans and not just in the interest of the bottom-line, so it will be a tough road to home, but I am confident that..... It's an ill wind that blows no good and ultimately we will be able to make this right."

As we noted, to ensure an uninterrupted supply of power from CFE and other producers to BEL, and also to provide time for possible negotiations with FORTIS, the Government has agreed to pre-pay another four million Belize dollars toward its future utility bills with BEL.

And so, now, the government that took over the phone company two years ago - will now take over the power company - which is the largest utility in the country. The circumstances are far different, and at this point it's not clear if the execution will be different. A lot of that depends on how BEL's parent company FORTIS will handle it - but judging from past events, Fortis President Stan Marshall would probably like to make it as difficult as possible for the government of Belize. We note that he has the same international lawyers as the Ashcroft Alliance, and reports are that this week he made the rounds in Washington DC- accompanied by CEO Young and a Friend of Belize attorney - presumably to tell the IMF and other multilaterals bad news about the government of Belize.

And, it's fair to speculate that if the PUP were in government, maybe all this wouldn't be happening. Yes, the PUP did have a botched utility privatization at BWSL - but there were no take-overs.

So we asked the PM, is it something about his style of governance that's sending certain investors scrambling to the exits?:…

Jules Vasquez
"But it's something that people do say that if PUP were in all of this would be running smooth - BEL would have any problem - BTL wouldn't have any problem. I know it's a loaded question because there are so many issues beyond that."

Hon. Dean Barrow, Prime Minister
"But that's exactly the point. BEL wouldn't have any problem - BTL wouldn't have any problem but the people of the country would be having a problem. Mr. Young is saying to me that - well there was a situation that was not dissimilar in terms of BEL around 2006 - government simply then got the then chairman of the PUC to simply give the kind of letter that I am now being asked to give. Well that's the difference - this administration is not going to do that. This administration is not going to give anybody a blank check written on the backs of the Belizean people."

So, from here the story moves to next week - when CEO Lyn Young is expected to get back to PM Barrow with a response from Fortis on whether it wants to sell out and for how much. We'll keep following it very closely.