Features — 07 April 2018
Before all hell broke  loose at BTL

In his address at the close of the debate on the 2017-2018 budget at the House of Representatives in Belmopan, PM Barrow declared that the business, BTL, is protected by the Constitution of Belize, meaning that members of the next government, be they UDP or PUP, will have a stiff wind in their faces if they want to privatize it again. We’ll really have to sleep with our own eyes on this one, to make sure that it is really so.

The PUP, 1989-1993/1998-2008, had followed the Thatcher/Reagan wave, and privatized telephone, water, and electricity. The privatization of water was a near immediate failure. The buyers called it the equivalent of “puss eena beg” and our government was “forced” to take it back.

The distribution part of privatized electricity was an up and down road. Belize is a developing country, and this translates to a lot of investments that won’t show profits in the books for a while. There is also the challenge of providing cheap electricity for the productive sector, and near free electricity for the part of the population that is living hand to mouth. There’s really not much room for a social conscience in a company controlled by private investors. It was no surprise when the UDP government took back that part of the electricity program.

Privatized telecommunications faced some of the same difficulties water and electricity did. The sole interest of private investors is the bottom line and this focus is not always compatible with the focus of a developing country.

The Barrow governments, 2008-2012, 2012-2015, and 2015-? were beneficiaries of oil luck Belize had never seen before. This “luck” was about or in excess of 1 billion dollars, the PetroCaribe program providing about 400 million of that in soft loans, and the BNE wells at Spanish Lookout providing around 600 million in earnings and taxes, according to some reports.

Two of the arguments against the Barrow government are that they spent much of the money unwisely, and that they spent nearly all of it without consulting the nation. These are questions the UDP will have to answer when the next general elections are called.

As to the windfall, at the end of the day one really cannot pat oneself on the back for it. We congratulate good luck, we don’t brag about it. We can, however, pat ourselves on the back, if we so choose, when we do the right thing for the people.

Notwithstanding questions involving court cases and management choices, to a great extent the legacy of Barrow’s UDP lies in the reacquisition of BTL (Belize Telecommunications Ltd.). The reacquisition of BEL (Belize Electricity Ltd.) should also add to this legacy. Interestingly, the catalyst for the BEL takeback was similar to the one that forced the takeback of BTL. The managers at BEL were concerned solely with dividends for the company’s shareholders. This couldn’t fly.

This story is not about the reacquisition of BTL, it’s about the beginnings of the company, before “all hell broke loose.” Much of what we relate here comes from the files of Mr. Greg Gill, one of the pioneers of BTL. Some information was also gathered from a BTL web page, and from Wikipedia.

It was a UDP government which “proudly” made the bold decision to privatize telecommunications.  On page 2 of the 1987 November/December edition of the government magazine, Belize Today, we see that the people PM Esquivel chose to chart the new path of Belize’s most profitable utility were Derek Aikman, his Minister of Electricity, Transport, and Communications; Nestor Vasquez, the chairman of BTA (Belize Telephone Authority), and Edilberto Tesecum, the CEO of BTA. The magazine described the move to privatize BTA, as “Bold and Forward-Looking.”

“The government’s decision not to renew the contract of Cable and Wireless PLC to provide international telecommunications services was a bold move. The consequent decision to privatize BTA and concurrently launch a comprehensive expansion and modernization programme is nothing less than forward-looking. Based on the impressive track record BTA has garnered and the expertise and experience its staff has accrued over its sixteen years of operation, there can be no doubt that the challenge and promise of spanning the world will be met satisfactorily. It is worthy to note here that the expansion and modernization programme is largely the handiwork of BTA staff members,” states Belize Today.

When we look at the history of BTL, we will see that the Esquivel government might have been a little unfair, might not have given proper respect to the Price government he succeeded. Properly, Esquivel’s UDP should have declared that it was “building on success,” for we will see where the Price government had made some major investments in telecommunications before Manuel Esquivel gave up his job as a teacher and was handed the helm of government on a silver platter.

According to the files provided by Greg Gill (and the BTL website), it started out under the Colonial government with magneto, the magneto crank phone, which was used in Belize from 1902 to 1962. In that first year, a magneto telephone linked Belize City with Consejo in Corozal. In 1908, Belize City got its first magneto exchange with 150 lines, with connection to the district towns. In 1911, a submarine cable connected Consejo with Chetumal.

In 1930, Belize City was expanded to 300 lines, using equipment from a US company, Stromberg Carlson, but the system was destroyed in 1931 when Hurricane Belize struck. By 1934 the telephone system was back up, and between 1955 and 1962 each district town had small magneto exchanges with 25 telephone lines.

In 1956, Cable & Wireless introduced a system with international telephone links, and in 1963 that company introduced dial telephones to the country, to Belize City. With the new dial-telephone system, Belize City had a capacity to serve 1,000 subscribers, with 592 connections being utilized. In 1968, Belize City’s capacity was increased by 300, and 1,112 people were connected.

In 1970, Belmopan had a capacity for 300 dial phones, with 136 subscribers. That same year Belize City’s capacity increased by 700, and a total of 1,436 people in the city had phones. In 1978, Belize’s international services improved with the opening of the Earth Station in Belmopan.

In Belize Today, the government magazine, we find that by 1975 Belize had established telephone links with Mexico, Central America, Brazil, Columbia, and Venezuela; and that between 1979 and 1982 (during a Price (PUP) government) $18.6 million was pumped into a BTA expansion programme. At this point, 1982, Belize had 7,140 persons connected by telephone in 11 exchanges.

This was the state of telecommunications in Belize when a UDP government took control of it, between 1984 and 1989. “The Cabinet decided this year (1987) that the time had arrived for Belize to handle its own telecommunications, both internal and external, through a company with majority share-holding by the Government of Belize,” said a 1987 issue of Belize Today.

Cable & Wireless was “given the first option to participate in the new company…”, but they declined. At the end of this exercise there is no longer a BTA. In its place is the brand new BTL (Belize Telecommunications Ltd.), with the Government of Belize controlling 51%, British Telecom controlling 25%, and 24% of the shares reserved “for Belizean citizens both at home and abroad.”

The new BTL acquired all of the assets of Cable & Wireless, and it embarked on an ambitious expansion and modernization programme, which would see telephone capacity expanded to 18,000 lines, and features such as speed dialing and conference link-ups added. To pay for the acquisition of Cable & Wireless, and the expansion programme, the Government of Belize backed two loans for BTL, one for US$12million from Barclays Bank of Canada, and one for US$2million from the local branch of the Bank of Nova Scotia.

A BTL web page says that on January 1, 1988, our brand new ship, the mighty BTL, was set in the water “with a 15 year exclusive license to operate telecommunication services in Belize.”

Enter Michael Ashcroft.  A Wikipedia page on the matter says that American investors from Mobile, Alabama, incorporated the Bank of British Honduras in 1902, and it commenced operations in 1903. In 1912 Royal Bank of Canada (RBC) bought the bank and proceeded to operate it as a branch. In 1987, RBC sold the bank to an investment group headed by Lord Ashcroft as Belize Holdings, Inc., then Carlisle Holdings, then Belize Bank Holdings; the new owners renamed the bank, “Belize Bank.”

We are told that in 1992, Ashcroft and friends increased their holdings in BTL, from 15% to 24%. And we see in the BTL page on the web, that in 2001 (under a PUP government (Musa)) Carlisle Holdings Ltd. (aka Ashcroft) increased its BTL shareholdings to 52 percent. We also see that the new controllers of BTL committed to a $50 million investment in GSM cellular infrastructure.

I do not need to tell you that 2001, that was the year when all hell broke loose.

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Deshawn Swasey

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