Email

Print

Their attorney, Audrey Matura, has produced documents from the Companies Registry, which discloses the shareholders. Among those shareholders are the Belize company, Innovative Energy Solutions, M&M Limited, G. A. Roe and Sons Limited, Bedco Limited, Bowen and Bowen Limited, and the Government of Belize. But Central LPG companies are flagging one of the shareholders. That American company is called BWT Holdings LLP from Jackson Minnesota. So, rather than speculating, we asked the Director of National Gas about the shareholders directly:

Voice of: Dr. Gilbert Canton, Managing Director, Nat'l Gas Company
"This is a public-private partnership. Really, it is a government infrastructure that has been put in place, utilizing through this public/private partnership, the technical and financial resources from the private sector. At the end of that period, that 15 years, this whole project goes over to the Government and the people of Belize and becomes their asset. So, we're only in there for a short period time to get this accomplished, to make sure that there is a provision for adequate storage in country, there's a mechanism for transparent prices, a mechanism for quality control. We then exit. To do that, we had to bring in the technical know-how, and the financial resources. The technical know-how is from all Belizeans really, who were former employees - As you know, I was the CEO of BNE. If you look at who all are employed by National Gas Company, they're mostly former BNE employees. They have a lot of experience in the energy field. They are Belizeans."

"The actual shareholding, if you notice, the shareholding is basically 61% Belizean. So, I don't know that you can say majority is owned an American company. The American company owns 39%. That is not a majority. The Majority is 61%, and it's Belizean. It is composed of 25% for the Government of Belize, and the rest are 5 local Belizean investors that took the risk of investing in this project."

Several weeks ago, Audrey Matura, attorney for the Central American Butane companies publicly questioned the tax breaks that the Government has legislated for the National Gas Company's launch. She claims that those tax breaks are too much ease to National Gas, while the Managing Director is asserting that she is misleading the public. Here are are a few of their points and counterpoints on the topic:

Audrey Matura - Attorney For CA Butane Companies
"Section 6 of our Constitution says that we are all equal before the law, but how come the National [Gas] Company is getting [a] special law to give them - they are exempted from all taxes, you know. You all need to do your research. If these major private companies continue operating, the Government will collect GST, income tax, exchange control prices, environmental tax, every tax. So, money from their money is going back into society for the good of all. Under this National Gas Company, no taxes are being paid. They're exempted from all taxes. So, you need to ask yourself. Why would a Government forego taxes that you need, revenues that you need to run the state, give privilege to a private company, which they own a percentage in, give them that privilege for 15 years? Do you know how much taxes we're gonna lose in a time of economic crisis?"

Voice of: Dr. Gilbert Canton, Managing Director, Nat'l Gas Company
"That is a huge inaccuracy and misinformation being put out there because if you read the legislation that governs what we're doing."

"Just like any major investment in the country, any development project in the country, there are fiscal incentives that are given to that developer for the period of the construction of the project, where you're allowed to bring in things duty-free, where you're given tax breaks etcetera. If you read the legislation, you'll see that everything has been quoted, the environmental tax etcetera is for the construction period prior to commercial operations. Once we get to commercial operations, we have to pay all those taxes. We have to pay the environmental tax. We have to pay land tax etc. We have to pay all those taxes. The only thing that we're exempted from, post the commercial operation date, is business tax. That's the only thing."

What's In New Butane Deal For Consumers

But, while we're still reviewing those details, we asked the Managing Director of National Gas to discuss how this regime change will benefit you, the consumer.

As we've reported, the change was presented as a consumer protection mechanism, and so, we asked Dr. Canton to explain how the business will work with them as the sole importers of LPG:

Voice of: Dr. Gilbert Canton - Managing Director, Nat'l Gas Company
"What we've done in that regard - it's really three legs that we're on: the energy security, which we now have in place because there is a substantial supply, and the ability to have that supply in Belize itself. 1.5 million gallons of storage, that is unheard of in Belize. I think that if you added up all the storage that is in the country, in size, that is only about 300,000 gallons. So, we have 5 times the amount of storage. The issue of energy security has been solved. In terms of the pricing and the quality, there is transparency in terms of the pricing because what we'll be doing now is that we have a supply arrangement - we had tendered for supply through the terminal."

"Even the three companies that have been importing were offered the opportunity to tender and bid on the supply to the terminal in Big Creek. They have ships that pass by Belize, go through the Panama Canal, go Honduras, and then they truck it across from there. Those ships could probably have stopped in Belize and supplied the terminal if they had wanted to continue in that role. We did the tender process. We had 4 bidders, 4 large players in the Caribbean. There was a successful bidder, Carib LPG Trading, and we have a 1-year contract with supply from them."

"The bid was actually who can deliver that fuel to the Terminal in Big Creek at the cheapest price. And so, we have a margin, it will be a Mount Belvieu number plus the margin that was bid on, and that will be the delivered price, the acquisition price to Belize."

"The quality of supply, there's been a lot of issues you know about where there's a regulated 70/30 blend of propane and butane. And what happens is that this is not necessarily what is being delivered out there. There's 90/10. There are all different blends that are out there, mainly 90/10, and that is really shortchanging the consumer. We will be producing and selling the regulated 70/30. That's why we brought in the propane and butane. We have a blending skid, and we have basically the ability to make sure that this 70/30 is what is being sold."

We also asked Dr. Canton to discuss the assertion from the former LPG importers that the Government has created a protected monopoly over the local butane market, which gives National Gas far too much influence. We put that to Dr. Canton:

Reporter
"For those Belizeans who may be worried that down the road, National Gas can go rogue and control the industry where consumers of LPG end up becoming price gouged."

Voice of: Dr. Gilbert Canton - Managing Director, Nat'l Gas Company
"Whatever we are allowed to charge is in the legislation. It is clearly spelled out what is allowed to be charged. If you look at it, there is no profit incentive for the shareholders. The shareholders are financing the project along, through debt and equity. So, there is a return on equity, and there is payment on the debt. There is no profit incentive. There is no reason to raise things to get more profit because it does not pass on to the shareholders. So basically, that whole concept of gouging is not necessarily one that applies. Also, you have to remember that we're restricting from going downstream. So, all we're doing is setting a uniform platform, so that anybody who wants to distribute and retail sell LPG in the country can now get the same price as their competitor."

Reporter
"But sir, nobody gets into business to lose money, and you guys have made a significant investment here."

Voice of: Dr. Gilbert Canton
"There will be a return to the investors based on the equity that they invested, but it's limited to that."

"I think Belizeans should rest assured that now, with the introduction of the National Gas Company, and the large investment in the storage capacities, that more than ever, they have energy security in LPG."

BBS Says Ir Will Be Strict

For the Bureau of Standards, it doesn't matter who the Government is allowing to import LPG into Belize. They say that they will be strict in their regulation of the industry, to protect Belizean consumers from any kind of abuse. Here's that Controller of Supplies making that point yesterday:

Jose Trejo - Controller of Supplies, BBA
"We have a duty as a regulator. How that market, or how the dynamic plays out, in terms of investment. I don't that this should be this department's preoccupation. We have a duty to monitor the prices. We have a duty to give advice to the Government of Belize, in terms of the monitoring of those prices, and to be on top of what is happening internationally with LPG. That advice is the responsibility of this department, and I think that this is first and foremost our responsibility and duty."