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US $78 Million due next Friday!

By William Ysaguirre, Freelance Reporter

The Government of Belize (GOB) will make one payment of US $78.16 Million to Dunkeld and the BTL Employees Trust by next Friday, November 10, and be done with the BTL nationalization saga, according to Prime Minister Dean Barrow.

Barrow announced this final payment at the Best Western Belize Biltmore Plaza Hotel in Belize City late Wednesday afternoon, saying it would bring an end to the saga of GOB’s compensation to the original owners of Belize Telecommunications Ltd (BTL), for GOB’s nationalization of the company in 2009.

The Caribbean Court of Justice (CCJ) had ordered GOB to pay US $78.16 Million to the Ashcroft Alliance by next Friday. The CCJ handed down the ruling via teleconference on Wednesday, after GOB lost its appeal in which it had challenged the validity of the expenses which the Dunkeld Group was claiming were

incurred by GOB’s nationalization of BTL.
The expenses were part of the original settlement of compensation for BTL which Prime Minister Barrow had worked out with Lord Michael Ashcroft in September 2015. Barrow and Ashcroft agreed that GOB would pay half the estimated amount ordered by the Arbitration tribunal in US dollars. The other half would be paid in Belize dollars, which the Employees Trust would invest in projects in Belize to benefit Belizeans. But this was to be after Dunkeld had been paid for its expenses, in US dollars.

GOB balked when Dunkeld presented its final bill for expenses, as it represented over 90 percent of the outstanding half of the compensation still owing. But the CCJ found no problem with Dunkeld’s accounting, and upheld the amount claimed as expenses to be paid in US currency.
Barrow could not conceal his disappointment in the CCJ ruling, saying the Court had missed the crux of the matter completely, in that they did not question Dunkeld’s accounting, even though they claimed expenses which were incurred long before BTL was nationalized. Barrow said the CCJ had abdicated its responsibility, in that it had done no independent forensic audit, assuming that the Dunkeld accountants were professionals, and therfore an independent audit would not come up with any different numbers.

The CCJ has ordered GOB to pay US $62,849,799.23 Million to the Dunkeld group. The remainder – $245,155.36 to be paid in Belize dollars was to be used to fund charitable projects to benefit Belizeans. GOB must also pay US $15,314,006.84 to the Employees Trust and also Bze $10,300,518.34. Only the amounts in Belize dollars would be available for charitable projects in Belize, which is considerably less than Barrow had anticipated in 2015.

The Prime Minister said the payment would not pose any serious burden on GOB’s finances, since GOB always knew it would have to pay compensation, and this was the restricted amount, for which GOB has been setting aside funds from 2009. Barrow admitted not all of it was in US dollars but fortunately the Central Bank has sufficient foreign reserves for one lump sum payment.

Barrow said this will bring Central Bank’s foreign reserves to $583 Million at the end of the year. He explained that under prudent financial management, the government should have enough foreign reserves on hand to cover at least 12 weeks, or three months of imports.
Central Bank Governor Joy Grant was on hand to confirm that, after the payment; even by the most conservative estimates, Belize would still have enough foreign reserves for 15.5 weeks of imports. Barrow said it will most likely be more as Belize is entering the height of the tourism season, and tourism revenues will bolster the foreign reserves even greater than 15.6 weeks, before the end of the year.

The CCJ ruling provide for GOB to pay by installments, in the event GOB was unable to pay the second half by November 10. Barrow said the Ashcroft attorneys made informal, unofficial overtures to work out an installment plan but this would incur an 8.34 percent annual interest on the remaining balance, to be compounded quarterly, in accordance with a clause in the arbitration tribunal award. And even the interest payments could accrue additional interest if GOB were to default on payment, at the rate of 6 percent per annum, which would be compounded monthly, as agreed in a clause of the settlement agreement.

Back in September 2015 when Prime Minister Barrow first announced the negotiated settlement with BTL’s former owners, he said GOB would pay $97 Million as partial compensation, the total bill for compensation was $557 Million.

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