Uncategorized — 21 October 2014 — by Kareem Clarke
PAC Chairman wants AG to investigate Petrocaribe loan

BELIZE CITY–Last Thursday, October 2, 2014 at the last meeting of the House of Representatives, the Government of Belize (GOB) introduced a motion called the Alba Petrocaribe Energy Loan Motion 2014 for the legislature to accept a loan in excess of over US$114 million dollars, which was borrowed over a two-year period, from 2012 to 2014.

It might have gone through without much fanfare; however, Chairman of the Public Accounts Committee and PUP Cayo South area representative, Hon. Julius Espat, has written to Auditor General Dorothy Bradley asking her to re-evaluate the authenticity of the loan, since Government took out the loan in 2012, but the loan motion never reached the House for approval until last week, yet the monies have already been disbursed.

Espat, in his letter, inferred that GOB subverted the Finance and Audit Act, since, he said, “you cannot approve something of that nature after the fact.”

He said, “The problem is that the Finance and Audit Act of the country of Belize specifies that any loan above 10 million dollars needs to go to the House for ratification, for approval, and that was not done. It was not done the first time, or the second time, and we’re now going into the third or fourth year, and it had still not been done. So what Government is trying to do is to table all the loans and say ‘We’re now seeking approval.’”

“But you cannot approve something after the fact, and that is the problem.

“Now what we are asking is that the Auditor General goes in and verifies the authenticity of the loans, verifies the legality of the loans, and to whom [the money] was dispersed. What is the quantity that was dispersed, to whom was it dispersed, and check to see if we are getting value for money,” wrote Espat.

Of note is that Section 7 (2) of the Finance and Audit (Reform) Act of 2005 permits the National Assembly to authorize Government to borrow monies from any public or private bank or financial institution or capital market, but according to Espat, Alba Petrocaribe Belize Energy Limited (APBEL) falls under none of the above.

In his letter, Espat states that “it is obvious that the Government is not seeking to borrow monies from any bank or financial institution, nor from any capital market in or outside Belize, but is seeking to retroactively validate borrowings from a private company that is neither a bank nor financial institution. It is accordingly fundamentally misconceived to think that authority for any such borrowing can be derived from the resolution tabled in the House…such a resolution cannot validate or confirm the 2012 agreement in accordance with the provisions of Section 7(2) of the Act, given that the agreement can obviously no longer be ‘validly entered into pursuant to the resolution’, it having already been entered into without authority of any resolution whatsoever.”

Espat did not say what would be his next move if the Auditor General’s Office does not comply with his request, but he noted that if the Auditor General does agree to carry out such an investigation, he will ask the Auditor General to report her findings to the National Assembly before the House reconvenes for the consideration of the motion.

The loans came from Petrocaribe in the sum of US$18,031,336M; US $76,331,016M; and US $19,944,954M during the periods of 2012-2013, 2013-2014 and 2014-2015 respectively.
Petrocaribe is an oil alliance between Caribbean states and Venezuela to buy oil on conditions of concessionary payment.

Under the agreement of Petrocaribe, or Alba Petrocaribe, Belize Energy Limited, known as APBEL, buys fuel from the state-owned company in Venezuela and sells it to Trafigura, which, through its subsidiary, PUMA Energy (Belize) Ltd., markets all petroleum products in the country.

Recently, APBEL opened an office on Coney Drive in Belize City, which serves to strengthen Belize’s ties with Petrocaribe.

Since the first shipment of Petrocaribe fuel arrived in Belize in 2012 under the new agreement, Belize benefited from having access to millions of dollars of finances.

The way it works is that Belize pays 40 percent of the fuel cost up front, or within 30 to 90 days of delivery. The payment of the remaining 60 percent is delayed through a concessionary arrangement, giving GOB access to about $60 million US dollars in financing per year.

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