It is an interesting turn of events, since the DFC had publicly announced last month that it would auction six terminals located in Belize City, Belmopan, Dangriga, Punta Gorda and Corozal on February 15 at Bliss Parade, Belmopan. Government was asking for bidders to purchase the terminals as an entire package.
Auctioneer, Alejandro Perez, told us today that as far as he is aware, that auction is still on, since that is the legal route that the DFC must take to dispose of the Novelo assets. However, it is believed that the bids won?t reach the reserve price, which has not been publicly disclosed. Still, it remains to be seen who will bid and what they will offer for the terminals on February 15.
On Wednesday, January 11, Prime Minister Said Musa had told us, ?We have to put [the terminals] up for public auction and if the price is not right from the private sector, then the Government will have to step in and buy [them].? But Cabinet?s announcement on Wednesday seems preemptive. In effect, it is taxpayers who will pay DFC for the Novelo assets, at what some observers think could be an inflated price. Again, that remains to be seen.
For their part, the Novelo family is saying that they don?t want the assets to be sold for cents on the dollar. In addition to the terminals, there are buses and real estate that were pledged as collateral. We understand that if the assets don?t yield DFC what the Novelo?s owe, the DFC can furthermore go to the debtors?the Novelo?s?for the balance. The DFC has already filed a claim against the individuals ? David and Tony Novelo and their father, Hipolito.
Even though the Novelo family had dominated the national transportation system, Government says that its intention now is to spread the transportation pie while controlling the management of the industry.
Cabinet also announced this week that Government would establish a Transport Authority by the start of the new financial year, April 1, 2006. The authority would be responsible for matters such as licensing, safety and standards, said Glenn Tillett, policy and planning officer in the Ministry of Transport, Works and Communication. He also told us that in the process of restructuring the industry, the Transport Authority would replace the current Transport Board and take on some of the responsibilities of the Transport Department. Under the Transport Authority would come a Bus Transit Agency that would manage the various terminals, he further stated.
The recent developments, according to Tillett, are coming out of a Halcrow Group study done two years ago, for which, he said, GOB had paid $200,000.
Again, GOB is attempting to divide the national transportation system into three major zones: northern, western and southern. Our readers will recall that late 2004, GOB attempted to issue 15-year licenses to operators who wanted to take up any of the three zones, under franchise arrangements that would have come along with perks such duty exemptions. But GOB failed to reach agreements with interested operators.
The Novelo brothers claim that in late 2002, former Transport Minister, Hon. Max Samuels, gave them an exclusive 15-year franchise to run a national bus company?an agreement that required them to make a $30 million investment in the industry. Instead, that entire plan failed and the company collapsed into receivership.
The bankers, Atlantic Bank and DFC, abandoned the receivership in December, claiming that because Government had allowed the Novelo brothers to resume runs under a new company, National Transportation, operations could no longer be viable.
About five weeks later, GOB re-opened the terminals, in what appears to be a move to persuade existing bus operators to get use to the idea of using the Novelo terminals as a hub for all bus operators. However, some bus operators told us that whether they continue to use the facility depends on the fee that Government intends to charge them. They have not yet been informed how much they will be required to pay to use the terminal facilities.
Some believe that this new transportation framework is merely an interim measure that GOB is taking, and that it intends to return public transportation to private hands. In recent years, GOB has made similar moves with water and transportation, turning them into public companies only to later return them to private hands.
For its part, though, GOB maintains that its plan is to have a publicly managed bus system in the long term, since things have not worked well under private management.
Cabinet Secretary, Robert Leslie, told us that the idea for the establishment of zones is not the same as the franchise proposals of 2004. When we asked what would be the duration of permits under the new Cabinet proposal, he said that it is the Transport Authority that would decide, though he does not anticipate that they would be short-term.
We understand from bus operators that no one has road service permits currently. David Novelo of National Transportation Services Limited told us that bus operators are running on letters that give them ?temporary permission? to operate their runs.
According to him, the Novelo family will apply for zone permits, although it does not intend to bid to purchase the assets that DFC and Atlantic are putting up for sale. They are maintaining that it was GOB that screwed up, causing their company to be unable to meet their debt payments.
The bus operators we checked with say they know little about GOB?s plan to issue zone permits, as Government officials has yet to meet them and fully explain the concept. Froylan Gilharry of Venus said that there does not appear to be much interest among bus operators in his association, the National Bus Owners Organization, to participate in the DFC bid next Wednesday. NBOO, he said, has 60 members.
Meanwhile, GOB continues to press ahead with the reopening of the Novelo terminals. Tillett told us that while only the Belmopan and Belize City terminals have been reopened to date, the Ministry plans to reopen the Corozal terminal on Monday. Work would begin next on the Dangriga terminal.