The Miami Herald

(c) Copyright 2002, The Miami Herald. All Rights Reserved.

Sunday, December 1, 2002

Energy for Belize dam invested in politics Even Hollywood stars weigh in


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For Hollywood A listers Harrison Ford and Leonardo DiCaprio, a battle
to stop a Canadian power company from building a hydroelectric dam deep
inside a secluded rain forest in Belize has become a cause

For Fortis Inc., based in St. John's, Newfoundland, the 164-foot dam
on the Macal River is about "[getting] the best system for the country
and ourselves," said Fortis CEO and president Stan Marshall.

For the Export-Import Bank and small-size exporters, including a
Miami company, Peco International Electric, it's business as usual.

"All I do is supply materials like a lot of other suppliers," said
Jose Lopez of Peco International, which operates as an agent to export
transmission equipment, bidding on projects. "I try to stay away from
their politics."

Still, when economics and the environment collide, it is hard to
avoid the politics.

The deal will bring U.S. companies and a government bank entangled in
an already existing controversy over whether a proposed dam will destroy
fragile rain forest and force Belizeans to pay punishing rates for

Peco International, Electric Supply of Tampa and Altec Worldwide LLC
of Birmingham, Ala., recently secured an Export-Import Bank loan
guarantee to export the equipment to the Canadian-owned power company in

The three companies will sell $5.8 million in electricity
transmission equipment to a Fortis subsidiary, Belize Electricity Ltd.,
which stands to receive power from the planned $30 million Chalillo dam
project on Belize's Macal River.

The Export-Import Bank recently celebrated its loan guarantee that
will allow three companies, including Miami's Peco International,
Electric Supply of Tampa and Altec Worldwide LLC of Birmingham, Ala., to
export the equipment to the Canadian-owned power company in Belize.

"We are pleased to support a win-win transaction that helps U.S.
companies expand into a small, but important, Latin American market
while enabling the buyer to approach its goal of 100 percent national
electrification by 2004," said Export-Import Bank Vice Chairman Eduardo
Aguirre in a statement.

The Export-Import Bank had no further comment on the project. The
bank provides loan guarantees for export financing from commercial
banks, which otherwise would not lend to companies operating in
developing countries.


But the project has caught the attention of some members of the
international community.

"It is an incredible view into globalization," said Ari Hershowitz,
director of the Biogems Project for Latin America at the Natural
Resources Defense Council in Washington. "It makes no sense for Belize
to turn away lower-cost energy to support a Canadian monopoly."

Besides the Defense Council, the battle is being waged by the Belize
Alliance of Conservation Non-government Organizations, BACONGO, which
has sued the National Environmental Appraisal Committee and the Public
Utilities Commission in the country's Supreme Court.

Hollywood has also been mobilized in opposition to the Chalillo Dam.

Harrison Ford, who filmed The Mosquito Coast in Belize ( formerly
British Honduras), published a letter in Canada's Globe and Mail in
September 2001 objecting to the dam and calling for preservation of the
protected rain forest. The official website of Leonardo DiCaprio, star
of Titanic, lists the dam as a cause for concern. Robert F. Kennedy Jr.,
the son of the late attorney general and an attorney with the Natural
Resources Defense Council held a news conference in Canada last year to
urge Fortis to drop the project.


The environmentalists charge that flooding from the dam would destroy
the habitat of the "threatened" Scarlet Macaw, the howler monkey and
the jaguar, as well as destroy ancient Mayan ruins.

Hershowitz said the lawsuits are the first by public interest groups
in Belize under new laws.

"Belize has never had an environmental lawsuit," Hershowitz said.

The first lawsuit charges that the environmental committee failed to follow proper legal procedures before approving a project in an
environmentally sensitive region.

The second lawsuit charges the Public Utilities Commission with
acting illegally by approving a power purchase agreement between the
electricity distribution company, Belize Electricity, and the power
generating company, Belize Electric, without public disclosure,
competitive bidding or economic analysis.

In the first case, the Supreme Court in Belize held hearings in July
and a decision is pending. In the second case, the court dismissed the
complaint as premature since final authorization has not been given.

Both companies are majority owned by Fortis. Belize Electric operates
the country's only hydropower facility, named Mollejon, and plans to
build the dam upstream.

Although not a defendant in the legal challenges, Fortis would suffer
a setback if the government loses to the environmental groups.

Belize is a lucrative market for Fortis. Profits from the two Belize
companies in the third quarter of this year were $5.4 million in
Canadian dollars (about $3.5 million in U.S. dollars), more than triple
the profits for Fortis' Maritime Electric, which includes U.S.

But many Belizeans are less enthusiastic about the change from a
state-run monopoly to a privately run venture. Consumer groups charge
that in this country of 250,000 people with an economy of some $700
million, Belizeans are charged three times what Canadian or American
consumers pay for energy and twice what people pay in neighboring Mexico
or Guatemala.


Critics say that, in part because of privatization of power, water
and electricity utilities -- which in theory is supposed to lower prices
for consumers -- some 70 percent of Belize's foreign earnings go toward
paying off the foreign debt and repatriating profits for the
foreign-owned utilities.

Marshall defended his company's prices and profits, noting that
electricity is expensive in Belize because some of it comes from
diesel-powered plants and is subject to fuel price fluctuations.
Countries in the Caribbean, which also depend on thermal power plants,
pay high rates, too, he said. Also, in order to venture abroad, foreign
companies need to earn higher profits, he said.

Environmental groups are not just upset about the threat to the rain
forest. The dam is an attempt to come to the rescue of the Mollejon
project, they say. Mollejon does not generate enough energy because of
lack of rainfall, so the new dam would flood the rain forest in order to
build a reservoir as backup for the first dam.


Fortis began construction of a road into the area in January, but
after the first lawsuit was filed in February, work stopped.

The Belize Audubon Society, Marshall said, supported the dam. The
Audubon Society threw its support behind the project, saying it was
satisfied with a mitigation plan (which will include steps such as
moving Mayan artifacts), which the company said it was implementing.

Because Belize's National Environmental Appraisal Committee
"approved it by a vote of 11 to 1 . . . we intend to proceed," he

Marshall insisted that the problem comes from just a handful of
environmentalists, mainly the Natural Resources Defense Council.

"Everything they've written is half truths or blatant lies."

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