[A-List] Dominica: powerless president, or merely spineless?

["Michael Keaney" <michael.keaney@xxxxxx>]

Dominican president faces heat on power
By Canute James in Kingston
Financial Times: December 18 2002

Few guests were surprised at the darkness that overtook dinner after the
lighting of the Christmas tree at the Dominican Republic's presidential
palace.

The blackout, like the others that have been plaguing the country for years,
has increased pressure on President Hipólito Mejía to resolve what is
euphemistically called the "electricity crisis".

Dominicans were expecting an end to the frequent and protracted blackouts
when parts of the power sector were privatised three years ago. Instead,
there has been no improvement, and power cuts have caused sometimes deadly
street protests in the Caribbean state of 8m people.

In seeking to resolve the problem, senators have voted to add $150m
(?146.6m) to a $600m bond flotation planned by Mr Mejía. The additional
money, they say, should be used to renationalise the electricity sector.

When the state power company was split up, AES of the US and Union Fenosa of
Spain bought into the distribution network, while the generating plants were
purchased by consortia including Gener of Chile, and Coastal, Enron and
Seaboard of the US. The government kept the transmission nets.

In the $700m transaction, the investors obtained a 50 per cent stake and
took management control. However, the promised relief through adequate and
reliable supplies never materialised and the government, independent power
producers and distributors have engaged in bitter, verbal battles.

In a recent session of the Senate, senior executives of Union Fenosa and AES
were grilled for six hours by legislators who accused the companies of
"abusing" their clients and of levying "high and exorbitant" bills.

Antonio Pantoja, a Union Fenosa vice-president, said the company's shares
were not for sale and it wanted a long-term relationship with the country.
However, AES might be willing to sell if its investment were returned, said
Guillermo Ibanez, the company's president.

Distributors claimed the crisis was caused partially by 3.5m delinquent
consumers not paying their bills. They also say the government and several
of its agencies are in arrears.

Caught between public frustration and the need to protect the country's
attraction to prospective investors, Mr Mejía is against renationalisation.
"Very rarely would I veto anything if it is properly discussed in the
Senate," he said. "They can do whatever they want because it is their job,
but I assure you I do not agree with buying back the shares."

Instead, consumers are receiving holiday visits from the "electricity
police". Following electricity rate increases of up to 300 per cent over the
past three months, the new force will police operations of the power
distributors and help them to collect from delinquent consumers.