| January 9, 2002
Greg Malone warns Belizeans of Fortis' aggression, and how Newfoundlanders stopped Fortis
An open letter to the people of Belize from Greg Malone, who fought Fortis' take-over of Newfoundland and Labrador's hydro-power assets and won
I am writing to you from Newfoundland in Canada. Many people here including myself have become very concerned about what Fortis Inc of Newfoundland is trying to do in Belize with the construction of the Chalillo Dam.
The people of Newfoundland have good reason to be suspicious of Fortis' activities.
In 1993 and 94, the people of Newfoundland and Labrador fought off two attempts by Fortis inc. to set up a monopoly for themselves over power generation and distribution in this Province.
Fortis already owns Newfoundland Power which distributes electricity to most of the Province. But what Fortis really wanted was to own Newfoundland and Labrador Hydro, the publicly owned Crown Corporation that generates that power. Fortis already had the golden eggs. Now they wanted the goose too.
So in 1994 the Newfoundland Government, with lots of Fortis connections, rushed ahead with legislation to privatize Hydro and sell it to Fortis on the open market. Fortis, and Government, hoped that speed and secrecy would help them get the deal through before it was fully understood and before opposition could be mounted to stop it. But the people did become informed fairly quickly and the Opposition grew swiftly and in the end we succeeded in stopping that Fortis take-over. It was a great victory as a Fortis monopoly would have been disastrous for our electricity rates, and, consequently also for our economic growth.
Newfoundland and Labrador Hydro is a very efficient and profitable , publicly owned Utility, of which Newfoundlanders are justifiably proud. The sale price of Hydro in 1994 was $300 million. However, since that deal was stopped, Hydro has returned, to the people of the Province, over $400 million in dividends alone, or $50-$70 million annually.
If Fortis had won they would have won big. They easily would have paid off their purchase price of $300 million, and then gone on collecting hundreds of millions of our dividends forever. Beyond that our electricity rates would have jumped by as much as 13% automatically upon takeover by Fortis, since private companies are allowed by our Public Utilities Board to make more profit than are Publicly owned Utilities.
Fortis was not doing the people of Newfoundland any favours. They wanted to create a monopoly for themselves, and sit back and line their pockets with higher rates and our dividends. The people here are still grateful that we stopped that take-over.
In Belize Fortis already charges 3 to 4 times what it charges in Newfoundland for the same amount of electricity. So even though it sells more electricity in Newfoundland than it does in Belize, it makes more profit off the Belizean people.
Now it seems that Fortis is trying to do in Belize what they were stopped from doing at home. Why would any Country want a private company, a foreign multinational company, to come into their Country and set up a monopoly with their power? The amount of damage foreseen by the Chalillo Dam seems extreme and off the scale for the amount of electricity generated. And that electricity would seem to be far too expensive to be of any great benefit to the Belizean economy.
Belize is famous here, as elsewhere, for its spectacular wildlife and rainforest environment. It stands to be a leader in eco-tourism which is a rapidly growing industry. It would be a pity to destroy a major component of this Resource, the Macal River Valley, for the further profit of a few Fortis shareholders.
Of course it is up to the people of Belize to decide these questions, but what disturbs me about the Fortis deal in Belize is what disturbed me about the Fortis deal in Newfoundland, and that is the speed and secrecy of the operation.
Secret deals are usually secret because they are bad deals. Secret deals are usually put through with as much speed as possible, so that people like you and I won't have time to find out just how bad they are until it is too late.
If this is a good deal for the people of Belize, tell us about it please. Show us the contract for Chalillo and Mollejon. Show us the Environmental Report. Hold public hearings and tell us all the good news. One thing Mr. Stan Marshall, CEO of Fortis Inc. has not said, and will not say, and cannot say, is that the Chalillo Dam will reduce the sky high electrical rates Belizeans now pay to Fortis. He cannot say Chalillo will reduce rates because it won't. In fact, it will probably make them higher.
This is Globalization at its worst. Fortis is using its money and Belizean government connections to rip off the Belizean people, just as it tried to do here in Newfoundland. Fortis' greed comes at a terrible cost to the people, the animals and the environment of Belize. Their shameless exploitation of the Belizean people cries out for condemnation by people who know better.
People of Newfoundland know better. We have been around the block with Fortis and have saved our Utility and our rate payers from their greed. I think we are in a unique position to support the people of Belize who know better, in their fight to save their Country from Fortisí aggression.
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