A week ago, we told you how the PUP was calling out the Government and Belize Infrastructure Limited on the management contract with Apex Belize Limited for the Civic Center.
The commercial arrangement with the private company and the Government is set up to try to ensure that the Government and taxpayers don't pay a cent to keep the facility open.
What the Government and BIL did is that the experts were tasked to find out how much it would cost to run the facility for 1 year. That was determined to be about 850 thousand dollars, and so, the commercial arrangement between the Government and Apex agreed that Apex must manage the facility, and raise the revenue required to cover that entire bill to keep the lights on, and the Civic open for business.
Beyond that, the facility is to be kept in a pristine condition.
So far so good, but the problem with the arrangement is what happens if Apex cannot raise the money to foot the operational costs? Well, that's when the Government will step in and put in the rest of the money meet the shortfall.
BIL's general manager, Christy Mastry described it as a "guarantee", and immediately, the PUP zoomed in on that term, interpreting it to mean a sovereign guarantee. Now, in the current climate, especially with the unresolved UHS debt of 90+ million dollars, the term "sovereign guarantee" is not lightly tossed around.
So, Mastry and Deputy Prime Minister Patrick Faber were roundly condemned by the PUP, which said that if there is any "guarantee", they are breaking the Finance and Audit Reform Act, by not getting parliamentary approval.
Well, today, BIL hit back with a press release of its own. It says that it, quote, "strenuously takes issue with and dispels the (notion)…that there is…any breach of the Finance & Audit (Reform) Act (which)….mandates requirements of the Government… when GOB borrows monies or when GOB guarantees as additional security for private entities in the event that they cannot make repayments to the banks, none of which is the case within the Belize Civic Center Management Contract."
So, what did Mastry mean when she described the Government's plan B as a "guarantee". We asked her to explain it today:
Christy Mastry - GM, Belize Infrastructure Limited
"The word guarantee the way it was used by myself as a professional architect has no negative connotation whatsoever. The reason it was taken in that light is just because of recent very negative connotation and the way that was used as an actual contractual guarantee was forcing the government into debt incurred by a failed contract to a 3rd party debtor. We have no such mechanism in our contract. When the contract is reviled on Monday, April 16th on our BIL website that will be relaunched along with all of our other construction contracts you will see that the paragraph speaking to any payment, speaks only of a compensation mechanism as a payment to services rendered for a company should they deliver their part of the services we commit/guarantee to commit to the payment mechanism."
Daniel Ortiz
"The opposition takes the interpretation this is a guarantee. You government are guaranteeing that if they fall short of this 850,000 thousand, we the Belizean, the tax payers will make up that short fall. Is that in anyway related to a guarantee, a sovereignguarantee?"
Christy Mastry
"It is a compensation, we have to pay them for services. We have hired a company, make no mistake we have hired a company. We could have done two things, we could have said 850,000 thousand is now allocated from the actual government purse. Two the national sports council and that is what they will use to run this facility for the year then we would have no opportunity to make a dollar off the facility and potentially we would not even have the money to continue to maintain it after the first year. That money has to go somewhere, the facility has to paid for. The way the wording is written and everyone will see it on Monday. If there is a shortfall, if the company only makes 400,000 thousand the government will pay them in a compensation mechanism to a maximum of 850,000 thousand. No more than amount and no less than that amount. Therefore we are now putting the project into the ability to earn revenue and sustain itself over its lifetime."
Daniel Ortiz
"Are you confident that this compensation mechanism is not falling a foul of any financial recollection?"
Christy Mastry
"This compensation mechanism is no different than if the government of Belize hired a media company to provide them a service for 3 years to cover them to do press releases, to do whatever on air - interviews they have to do and to provide them with a general service that they are obligated by a contract to compensate them toward doing. Should that service not be provided, the government just like any government would have the right to terminate and seek a different private party to provide the same service."
The BIL manager says that the full details of the contract will be posted on their website by next week Monday.
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