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Daily News - Wednesday, 03 January 2007

President greets more than 1,000
President Leonel Fernandez stood in a New Year's reception line for over four and a half hours, and was greeted by a huge number of people. The yearly procession was headed by the Papal Nuncio, Monsignor Timothy Broglio, and Dominican Cardinal Lopez Rodriguez and other religious leaders, followed by the diplomatic corps and the military. The marathon event, a yearly test of Presidential endurance was, according to witnesses, the longest ever. The President and his wife were accompanied by the Vice President, Rafael Alburquerque and his wife during the four and a half hour event. For most of those present, it was a case of see and be seen; appropriate for a visit to the Presidential Palace.

Lotsa money for the Metro
The weekend news was devoted mostly to reports about budget items and the political maneuvering surrounding the party conventions. Listin Diario reported that the Santo Domingo Metro would receive RD$7.18 billion in loans (EUR163.4 million) from France, Spain and Germany. According to the paper, the money will go to the Siemens-Thales Consortium for the different sub-systems needed to put the first line of the Metro into operation. The money deals were approved by the government's PLD senators only, since the PRD and PRSC senators walked out of the session after their request that the loans be studied in committee was rejected by the PLD majority. In a related story, Diario Libre says that the Metro will consume RD$12.28 billion in 2007. The paper says that the first rapid transit line will take up 55.5% of the Public Works Ministry's budget. Together with the seven billion pesos coming from overseas, the budget assigns another RD$5.16 billion in local resources. When first announced, the Metro was supposed to cost RD$3.0 billion.

Pensions for good friends
The last months of the PRD-led Congress approved nearly one thousand pension packages for former politicians, legislators, siblings of legislators and relatives. The pensions vary in size from RD$3,000 to RD$60,000 per month. According to Listin Diario, several former Senate and Congress employees were also blessed with generous pension plans, despite not having retired. While the article mentioned names and relationships of the more prominent figures receiving these handsome pensions, it also mentioned that pensions of between three and twenty thousand pesos per month were distributed to "ordinary people."

Committee suggests budget changes
The President's office sent the budget to Congress, where the ruling party has the majority, on 27 December for approval before the end of the year. Legislators, nevertheless, postponed its approval for the start of the year and sent it to a joint congressional commission. The commission that is studying the RD$258 billion 2007 Budget has agreed to reduce RD$400 million from the funds set aside for legislators' NGOs, RD$1.2 billion from the Government Works Supervisor's Office and an undetermined amount from the Ministry of Public Works funds. These funds will be reassigned to other institutions. Hoy newspaper reports that deputy Ruben Maldonado said that the commission would submit its report by Thursday 4 January. The deputy was firm in his response to a question about the NGOs related to former or current legislators. He said that the PLD-dominated Congress is firm is its stance that will remove all funding from non-functional NGOs. According to the legislator, some of the institutions that will benefit from the budget changes are Hogares Crea, Corazones Unidos, the Plaza de la Salud, and the Dr. Marcelino Velez Santana Hospital.

Government budget priorities
A reading of the proposed budget, seems to confirm that President Leonel Fernandez is assigning priority to push forward construction of the first line of the Santo Domingo metro. In 2006, the government consistently allocated more funds to the metro than to the environment, education and public health ministries. The trend for this coming year is to assign even more, with the government multiplying by five the 2006 budgeted allocation for the metro in its total allotment for 2007.
In addition to the loans the government will be taking on for the construction, the government is proposing to allocate RD$12.25 billion to the budget or 55.7% of all the funds going to the Ministry of Public Works for construction projects. Of the funds allocated, RD$5.15 billion will come from local revenues and RD$7.1 billion will be loans. The government hopes to complete the metro in the first half of 2008, when the present Fernandez term ends. Technical Minister of the Presidency, Temistocles Montas said that the government would use 50% of the Verizon deal funds for the metro project, or RD$2.8 billion.

Budget priorities vs. development
Diario Libre editor Adriano Miguel Tejada complained in a year's end editorial about the way in which the Fernandez government priorities are reflected in the budget allocations. He said that budgets should be national development instruments, but the Dominican budget reflects the fact that the government will spend more on paying the public debt and on the government payroll than on development investments this year. Furthermore, he complains that a relatively high percentage is spent on financing political parties and their campaigns. "It is unforgivable that with so many needs, thousands of millions of pesos are spent on the 200 or so members of Congress and that so much money needs to be thrown at the political parties that have shown no commitment at all to the development of Dominican democracy. Also questionable is the insistence on investing in projects of dubious social and economic yield when leaving the serious problems that are obstacles to the development of a nation without apparent solution," he writes. He concludes: "It is unfortunate that a matter of such importance is not even discussed, more so when there was not even a consensus among those who prepared it."

Cogentrix to natural gas
Speaking last Thursday, CDEEE administrator Radhames Segura announced the undoing of the 297-megawatt combined-cycle, oil-fired electric generating Cogentrix facility deal that was signed when he was in the same position with the CDE during Leonel Fernandez's first presidential term (1996-2000). Basic Energy, which operates Punta Cana-Macao and Bayahibe power plants, has agreed to convert the plant to natural gas, lowering its operation costs. The Dominican government will pick up the tab for the re-conversion, estimated at US$25 million, according to Segura himself.
The Cogentrix plant began commercial operations in 2001, but was shut down shortly after because its closure was less costly for the government than its operation. The nightmarish Cogentrix contract was signed by then and present Technical Minister of the Presidency Temistocles Montas. According to the terms of the contract, Cogentrix obliged the government to purchase power from the plant at a cost much higher than for what it could be sold to the distribution companies. Under the long-term Power Purchase Agreement with the San Pedro facility, the CDE was obliged to purchase its output for $0.09kWh, while it was bound to resell it into the wholesale market where spot prices stood at US$0.07/kWh. The deal produced an US$8 million loss when in operation, compared to US$4 million in losses with the plant shut down.
The government had signed the 20-year PPA on September 1998, and payment of obligations of the CDE under the PPA were guaranteed by the Dominican government and ratified by the Dominican Congress in May 1999.
The government has been seeking to renegotiate with the company since 2002 and eventually chose to keep the plant closed. The plant was funded by the Inter-American Development Bank, KFW of Germany and an investment from the Commonwealth Development Corporation, a UK government-owned fund.
Press reports have noted that it will cost an estimated US$16 million to build a gas line from the AES Andres natural gas terminal in Andres, Boca Chica to San Pedro de Macoris, in addition to the conversion cost of the plant in order for it to run on natural gas.

Benign drug bail revoked
The First Penal Chamber of Appeals has revoked a decision by Judge Jose Mejia Duverge that authorized RD$100,000 bail for four people accused of cocaine trafficking. The group of four, that includes a Puerto Rican, was arrested when 388 kilos of cocaine were discovered in an operation at a cockfighting club at Km. 32 of the Duarte Highway on 14 December. Appeal court judges Olga Herrera, Enrique Marchena and Carmen Fortuna revoked the authorization on the grounds that there was too much evidence against Federico Castillo de Padua, Edicson Javier Maria, Francisco Amaury Simon and Puerto Rican Jose Antonio David Colon, who were being kept at the Drug Control Department jail, but now will be sent to the La Victoria penitentiary. The District Attorney's office had appealed against the judge decision.

To end the year, Adriano Miguel Tejada of Diario Libre wrote about the "politicocracy" that prevails in the DR today. He writes on the predominance of politicians:
"Any economic model that is based on a government as the engine of the economy and all national activities, can only lead to an endless series of fiscal reforms needed to levy taxes from the population and impoverish it further each day. That is what has been happening in our country.
"The problem is that the government does not generate money and it needs to extract an increasingly greater quota from taxpayers in order to finance all its programs and keep its growing payroll.
"That quota creates a vicious circle in which the private sector invests less and less because of all the obstacles and costs of doing so, and consequently the government is becoming more and more indispensable at an even greater cost to the economy in general.
"All that takes place without solving any of the fundamental problems, even its own corruption that has created a political class with a great accumulation of wealth that makes it independent of the country's traditionally powerful forces. The politicians have become first class citizens, owners of the infrastructure and controllers of instruments of political power. The result is a caricature of democracy and its conversion into a kind of "politicocracy" in which political values and political matters permeate all activity and have become the dominating values."

Electoral board gets tough
The Central Electoral Board (JCE) is installing a program to monitor all of the nation's civil registry offices. According to JCE chief magistrate Cesar Castanos Guzman, the modernization process should "vaccinate" the offices against corruption and the practice of issuing false documents. According to the voting czar, the justice department and the JCE will join forces and inspect each and every one of the civil registry offices twice a year.

New car taxes go into effect in August
The Department of Taxes (DGII) has announced that the taxes included in the tax package approved by Congress will go into effect this August. Bill 495-05 (the tax "correction" bill) stipulates that the new stickers for circulation or road tax will have to be acquired between August and October 2007. Vehicles entering the country before 31 July will be subject to the current rate of RD$2,200 for their license plates. The cost of renewing license plate stickers will soar to over RD$5,000 for the newest vehicles, and for those between five and ten years old the tariff will be RD$3,000. For older vehicles, the cost will be RD$1,500. All these taxes will be adjusted for inflation on a yearly basis.
The tax package was not signed into law yet law as it was resent to Congress to be harmonized with the DR-CAFTA.

Self-generation costs billions
A report by the World Bank estimates that the level of electricity delivered by privately owned, small generators totaled 2.71 giga-watts in 2001. This represents 22% of all electricity generated in the Dominican Republic at a time when electricity provision was considered to be "stable". The majority of the electricity came from "emergency" generators or power inverters that run off batteries. The report, quoted in Listin Diario, says that the crisis was so severe that businesses and private homes spent an estimated US$37 million on self-generation, the equivalent of RD$1.24 billion pesos each month. The report did not discount the possibility that the figure would continue to grow as the electricity service continued to deteriorate and petroleum prices continued to rise. Apparently, the source of greatest concern for the World Bank is the fact that this sum of approximately US$444 million is nearly the equivalent of what the government spends on the electricity subsidy the generators (US$520 million in 2006). A further RD$884 million pesos has to be added, since this is the amount that the Superintendent of Electricity provides for a subsidy to the electricity distributors that provide service to the poorer barrios. The World Bank described the situation as "alarming."

New Year's toll
The emergency authorities report that the death toll for the New Year's holidays has been placed at ten. Over 300 people were reported injured. This total is a significant reduction from the 17 deaths reported in 2005. The injured, however, were more numerous than in 2005, 300 in 2006 versus 234 in 2005. Of the ten deaths, nine resulted from traffic accidents and one by intoxication. Of the injured, 22 were hurt by fireworks and 13 by intoxication. AMET officials seized a total of 149 vehicles from drivers in violation of the anti-drink laws.
Overall, 38 people lost their lives over the Christmas and New Year's holidays, according to the Center for Emergency Operations (COE). A total of 942 were injured. Some 345 traffic accidents were reported, representing the chief cause of the fatalities. Diario Libre reported that 33 of the 38 deaths were traffic related. Despite these tragic figures however, the number is down by 38% from 2006 when 61 people lost their lives. As part of the Safe Holiday 2006 program, 736 roadside aid stations were set up and 36,000 volunteers provided their services to the safety operation.

Hospitals filled up
Most of today's newspapers print pictures of patients lying on the floor while receiving primary care at hospitals in Santo Domingo. The Dario Contreras Hospital, one of the nation's busiest, does not have enough beds to treat all the emergency patients who were admitted over the holidays. Staff even had to use the neurosurgery unit hallways to accommodate patients who were waiting for beds to become available. The head of orthopedics and trauma, Dr. Guillermo Garcia Lorenzo, said that the situation was continual due to a lack of funding. The "Dario" as it is known, dealt with 384 emergencies over the weekend, 141 of which resulted from traffic accidents. It also treated 44 people for knife wounds, and 26 gunshot victims. According to hospital director Dr Hector Quezada, this year's end saw a reduction in the number of emergency cases, but only slightly. The figures were 393 in 2005 and 284 for 2006. Quezada supported the continuation of the restriction on the sale of alcoholic beverages as well as those restricting alcohol consumption and driving.

*788 Police hotline
The Ministry of Interior and Police has announced the creation of a new hotline for people who wish to report violations of the decrees on the sale of alcoholic beverages (Decrees 308-06 and 316-06). Residents of the National District, and the provinces of Santo Domingo and Santiago can just dial *788 to report any breaches of the law. Minister Franklin Almeyda explains in a short press release covered by El Caribe that the Center for the Control of Liquor Sales would respond to such calls "immediately". Most local establishments have supported the ministry's efforts to re-establish the restrictions after the Christmas and New Year's holidays.

Police to seize weapons
Anyone entering a public entertainment venue with a weapon is running the risk of having it confiscated by the police, and losing the license to carry a weapon. This warning was issued by the chief of police, General Bernardo Santana Paez. Santana Paez said that it would no longer be permitted to store weapons upon entering discos or other popular spots where alcoholic beverages are served. The general said that the police would be redoubling their efforts to reduce the number of gun-related incidents in public places. The measure even includes off-duty police and military personnel. From now on, according to the police chief, no weapons of any sort will be allowed in places where alcohol is served.

Baseball Round Robin
The Dominican Baseball League has entered the semi-final stage of the yearly winter baseball tournament. The round robin phase includes four teams, the Gigantes, the Aguilas, the Azucareros and the Tigres. Two teams, the Leones del Escogido and the Estrellas Orientales were eliminated during the first phase.
So far, the Gigantes del Cibao, from San Francisco de Macoris, have continued their regular season rhythm. At 5-1, they lead the round robin event, followed by the Aguilas Cibaenas at 4-2.
The Tigres del Licey, one of oldest franchises in the Dominican Republic, got off to a bad start, but went on to recover and beat the Aguilas by a 4-3 score last night to go even at 3-3. The Azucareros, who just nosed out the Estrellas Orientales in a one game playoff, have been just terrible over the last six games, losing every one of them.
The round robin tourney will classify just two teams for the final play offs to decide the 2006-2007 champions.
Many of the fans are calling for a "Final without tolls!!" referring to the lack of highway tolls between San Francisco and Santiago. Such a final would leave Santo Domingo without a playoff team for the first time in living memory.
Tonight's games:
Santiago de los Caballeros: Estadio Cibao (8pm)
Licey vs. Aguilas
San Francisco de Macoris: Estadio Julian Javier (7:30pm)
Azucareros vs. Gigantes
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