With the introduction of ZONING in public transportation last week it would seem that the GoB has decided to put the $30million DFC loan to the Novelos behind them. Last week PM Dean Barrow explained to Amandala’s Ms. Adele Ramos that: …we really are hamstrung. Efforts were made I think, certainly by the DFC, to get back some of the 30 million. All they were able to lay hold of were, I think, things like some terminals and some buses that weren’t very valuable. The problem lay and lies in the fact that at the time, the DFC, manipulated by the politician, gave the loan without proper collateral.
The PM did not explain that by taking back routes from the Novelos (not issuing them permits), the GoB was effectively NATIONALIZING…transferring the Novelo debt to the DFC…to the Belizean people. At the end of the day somebody’s got to pay.
We see where these routes have been issued to new operators. Yap, to date the spoils in the South and East/West routes have been shared out. In the coming weeks the spoils in the North Zone will be shared out.
A little history is important here. Somewhere in the dark corners of the PUP government 1998-2003, using the lame argument that there was too much racing among buses on the highway, they decided that the way forward in the bus industry was to create a sole carrier.
We understand that Z-Line from Dangriga bought out the huge Batty’s franchise (North, and East to West)*, Gilharry’s (a not so small operator in the North), and a few other not so small operators. It was obvious to those who didn’t have on blinders that Z-Line was the party favored by the new PUP to run things.
But, Novelo Brothers from Benque Viejo, and James from Punta Gorda, refused to buckle. In a surprising move Novelo Brothers obtained a massive loan from DFC (a big loan from a commercial bank figures in the deal too) and purchased the Z-Line franchise. With the purchase of Z-Line the Novelo Brothers gained total control of the highways, except for the Punta Gorda run which they shared with James. The Novelo Brothers later explained their purchase of Z-Line as necessary for “economies of scale.”
Whatever, whatever (the escalating price of oil, sniping, badwill), the Novelo Brothers Bus Line collapsed and went into receivership.
Fast forward. The PUP government 2003-2008 sold off/acquired many Novelo assets to pay towards the massive loan that the brothers had acquired from the DFC. Some assets also reportedly went to a commercial bank.
Fast forward again. Enter a new UDP government. The bulk of the Novelo loan still isn’t paid off. The new GoB takes away some of the routes they had purchased (or, thought they had purchased), and, if we believe the new PM (sometimes they have to, or decide not to tell the truth), it ehm seems they have declared the 30-million dollar deal squits. The new government then proceeds to issue the routes (runs) taken away from Novelo Brothers to new operators.
We know there is no money in the bus industry right about now, but the routes still have tremendous value. Novelo Brothers couldn’t pay for the routes, which were purchased with PUBLIC monies. The 30-million dollar question is, minus payments made, who will pay for the routes?
There is no money in our system right now either, but we do hold out hopes for the future. Are the new operators really getting these routes just for the price of the permit? Is it a fire sale? Will government salvage something from our lost dollars?
While I didn’t support the idea of a monopoly franchise, I harbor no ill-will, none whatsonever towards the Novelo Brothers…or anyone else in the bus business. This is a capitalist system. We have to respect, even bend a little, for entrepreneurs.
Oh, government can argue that the Novelo Brothers never really purchased a monopoly on the routes they got from other big players in the industry…because it was not theirs to sell. So, the routes are theirs (GoB’s), freely to give to whoever they choose.
True, periodically the government issues permits to bus operators. But, for two generations Batty Brothers controlled the East to West route, and for a lot of that same period Z-Line controlled Dangriga/Belize. And the Novelo Brothers did say that the previous government had agreed to maintain the status quo. The fact they instructed DFC to issue them a 30-million dollar loan bears that out.
It is my humble opinion that if it is just one deferred centavo on the dollar, the public, those who have had to weather this transport storm caused by bad governance, should get that token centavo from bus operators who are biting into the new transport pie.
* I think the Novelo Brothers have said that they purchased Batty Brothers for over 5 million dollars. My understanding is that they reimbursed Z-Line for purchases that company had made. After more than five years the entire story about this bus saga is still to be told. Major players, namely former Minister Ralph Fonseca, former Minister Henry Canton, former Minister Maxwell Samuels, and the owner of Z-Line, Mr. Eugene Zabaneh, are yet to speak.