story / editorial
Odyssey Comes to Conclusion
by Thomas Tomczyk
ups and down expected before smooth waters.
Guillen shows the ballot boxes prior to the vote.
a convoluted and drama-filled vote, several hundred RECO shareholders
put their faith in their community leaders and cast ballots
in cardboard boxes of Kleenex and Bleach. They decided to sell
52% of Roatan Electric Company to an American Billionaire Kelcy
The process remains in question as some dispute the wisdom and
legality of disregarding a national committee which gave Kelcy
Warren the third highest score of six participating bidders.
The heart of the matter is whether the Honduran government committee
was only evaluating who the winner should be, or whether it
was selecting who the winner would be. We will never know "what
could have been," as under pressure from local politicians,
the Honduran government washed its hands from the determination
of most islanders to sell the shares to Warren. "It took
time for the government to realize that the evaluation committee
recommends, but the shareholders will decide," said Evans
McNab, president of RECO board.
energy customers on Roatan still take their energy prices
for granted. The current price of energy paid by Roatanians
is less than half what Utilans and Guanajans are paying. While
the RECO price of Lps. 3.6/Megawatthour has remained the same
since 2006, on Utila it is 128% more expensive, or Lps. 8.2,
and on Guanaja Lps. 7.4.
Two entities created the failure of RECO and its subsequent
placement under emergency government control in early 2007:
the old RECO board's poor administration and the patronatos
leaders' mortal grip on RECO to maintain fuel surcharges even
though world fuel prices skyrocketed. As recently as a year
ago, patronato leaders and RECO board members held one another
at a standstill through mutual accusations of endangering
the future of Roatan's electricity--a standstill which by
February 2007 could only be remedied through government intervention.
13 months later, after the government saved Roatanians from
this failure, patronatos and RECO board have decided to disregard
the findings of a government-sponsored evaluation commission.
Instead, they have decided to give the right of a 52% share
purchase to someone who already once passed on the share-purchasing
In October 2007 Warren, a businessman with experience in natural
gas pipelines, demanded a 60-day due diligence without guarantying
purchase. The government decided that 60 days was too long
and began a bidding process that lasted 141 days and was expected
to finalize somewhere around March 31. "It was the biggest
mistake for the government and Warren. Maybe if he [Kelcy
Warren] had asked for 30 days we wouldn't have had to go through
the bidding process," said Evans McNab, current RECO
After receiving six bid offers, the national evaluation committee
decided that Punta Cana, an energy producer from Dominican
Republic, had the highest number of points in the bid. Honduran
Fredy Nasser's Terra Group came in second, and Warren's offer
was ranked third.
After much drama, meetings and voting, on March 5 the government
finally gave in to the demands of the local leaders and RECO
board. Honduran officials wanted to wash their hands of any
legal consequences that could follow. "We went through
this process, but it was complicated and convoluted.
We are not intervening in the board of shareholders. You will
decide this [who will win the bid], but under your own responsibility,"
said Aristides Mejilla, Minister of Defense and President
of the RECO intervention commission.
Mejilla made it clear that the Honduran government reserves
a right to intervene in RECO in case of mismanagement, natural
disasters, etc. as energy production and distribution is a
strategic enterprise vital to Honduras' economy and image.
"This company has an enormous importance to the economy
of the country," said Mejia.
So began the RECO shareholders' meeting that would conduct
two votes: to accept or reject the evaluation committee's
results, and then, if the vote was to reject, to whom to award
the 52% share buy-out option.
The quorum of 43,500 shares could not be produced and another
meeting on the following day was called.
COSTS IN HONDURAS
to RECO constitution, shareholders can decide and vote without
a quorum a day after the original meeting. On March 6, the
final day of the meeting turned into a melee as hundreds of
voters and spectators turned in to cast their RECO votes.
everyone could vote as they were hoping or even expecting
to do. Six years ago Sandra Segarich, for example, an American
property owner in Sandy Bay, bought her Sandy Bay property
along with one RECO meter and has been paying her electric
bill ever since. Effie Tatum, 82-year-old seller of the Sandy
Bay property, died in 2006, but according to RECO it is the
deceased islander who has the right to cast her vote in the
assembly not Segarich. "They told me that RECO assets
are not transferable," said Segarich.
While a line of several hundred people queued to cast their
votes, president of the Bay Islands patronatos agitated the
voters. "Vote 'no' and vote for Kelcy Warren," Rosa
Hendrix shouted through a loud speaker. Regarding Hendrix's
conduct, Governor Thompson said, "This is not right."
Three of the Punta Cana representatives present at the meeting
were visibly upset. The Punta Cana reps were shouted at, booed
and waved at not only by some angry RECO shareholders, but
even by RECO board members themselves.
"We won the bid, we are the winners," said Punta
Cana representative Oscar San Martin. "I don't understand
why the same people who bankrupted this company are now deciding
about its future," said San Martin. "We might have
to come back in two-three months to save you," San Martin
told the RECO board.
Amongst the 142 votes ultimately cast for Punta Cana was Jerry
Avarado, Mount Pleasant patronato member. "The patronatos
are divided on who to support. We want the decision of the
government to be respected," said Avarado, wearing a
Che Guevara t-shirt to the meeting.
Even some local political leaders were skeptical of Kelcy
Warren but hesitant to go on record. The politicians who were
vocal and outspoken praised Warren and tried their best to
present him as the "best choice for Roatan." "We
are confident that we have found a partner who could be a
part of this community," said Evans McNab about Kelcy
Warren. Few people have challenged this or questioned the
logic of going with an individual rather than a company.
Warren has no personal experience in energy production or
distribution and no experience in third world country projects.
While Warren is seen as a rescuer of Roatan, a knight in shining
armor, it is far from certain how things will turn out. Warren
is a businessman. For business reasons, not for the community's
benefit, he asked the government for a 60-day review of RECO
When the votes were counted the decision looked like a landslide:
22,146 shares went against evaluation committee recommendation,
with only 142 for Punta Cana. It was decided. But as Punta
Cana representatives headed to their hotel rooms, they threatened
legal action to claim potential profit from an "awarded
In the days following the vote, Warren began paying off the
$1.6-2 million RECO debt to Banco Atlantida. By end of March
he is expected to pay off the debt to ENE, National Energy
Company, estimated at $8-11 million. The entire purchase price
of around $15 million also specifies investment over time.
The 52% RECO shares were purchased for $3 million, or $122.75
a share. In 1992, each RECO share could be purchased for Lps.
100, or $15.40. Over 16 years, that translates to a gain of
800% and averages 13.85% cumulative interest gain a year.
When during Semana Santa holiday RECO GM Humberto Mesa took
his holiday and went to the coast, the de facto management
of the company was left in the hands of Matthew Harper, chosen
by Kelcy Warren as RECO's interim GM.
Harper, who owns his own electrical contracting company, started
his career with RECO in 1991, the year the company started.
"In short term I feel that I am the right person for
the job. I am an electrical engineer by profession, I know
the company and the RECO system, I have a good rapport with
people, I speak both languages," said Harper. "I
know how RECO used to work when it worked well and I am trying
to get it back to that," added Harper. "I am doing
this for four reasons: I love RECO; Kelcy trusts in me; as
a citizen of the island I also need dependable power; and
I know that I can make a difference."
During Semana Santa RECO ran on 9.8 Megawatt of power. A majority
of the power, 4.9 Megawatt, came from rented units from Nacional
de Inginieros company. "For the first time in a long
time we didn't have to ration power," said Harper. The
disruptions and power cuts came when a northern weather front
and strong winds brought down several power lines.
Harper said that Kelcy Warren has specified a four- and 12-month
plan for the company: "We are sticking to technical proposal
and due diligence." In the first several months the plan
is to rent additional generators and perform corrective maintenance.
A first machine bought by RECO will run on more efficient
and cheaper bunker fuel (HFO). "In this type of company
we need a profit margin of around 10%-15% and by September
we should have around 6%-7% [profit] margin," said Harper.
Another crucial issue is the structure of the company. RECO
employees have not received raises for several years, the
morale is low and the organizational structure of RECO is
inefficient. According to Harper, after reorganization and
with additional machines, the work of the current 60 RECO
employees could be done by 40 to 50. "We want for people
to see RECO as a place to work until retirement," said
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______________back to top
Western Guilt Complex
by Thomas Tomczyk
When Gillian Gibbons, an English teacher in Sudan, apologized
for offending Islam by naming a class teddy bear Muhammad,
the only discussion in the Western media was whether she
should have named the teddy bear and did she knowingly offended
"No good deed will go unpunished," and as western
Europeans try to repay debts to slaves, they fail at making
others accountable for their share in the burden of responsibility.
Don't expect apologies from Muslims for occupying the Iberian
Peninsula for 800 years, for taking Constantinople, or for
occupying the Balkans for 500 years. Many societies are
unwilling and unable and not expected to exalt expressions
of contrition. Americans are more hesitant to apologize,
or feel guilt. Don't expect any time soon any US congress
or president apologizing for slavery, dropping napalm in
Vietnam or using depleted uranium in Iraq. Arabs won't apologize
for slave trade, Muslims for destroying the Church of the
Holy Sepulcher, Chechens for slaughtering children of the
Beslan School, Middle Easterners for honor killings.
Western guilt which has dictated political and military
responses is directed towards religious and racial minorities
who are perceived as weak, disadvantaged and unable to defend
themselves. However, many of these groups are doing quite
well in defending and imposing their own interest on the
west. They don't hesitate to take advantage of the feelings
of responsibility in the western mind. In Jordan I talked
to an Arab Muslim man who mentioned that "Western Guilt"
concept with a smile. "I know you have it," he
Well, I am a bit different. I was born in Easter Europe
and don't feel this "Western guilt" as much. Eastern
Europeans, for the most part, have not developed sophisticated
mechanisms of rationalizing and internalizing the injustices
they've committed, but instead have focused on the suffering
and wrongs done to them. They are still caught in issues
mostly dealing with shame, not guilt. The self flagellation
of Western societies is not accepted by their eastern neighbors.
Political correctness has brought a shift in Western self-perception
and understanding. The Crusades is a great example of a
shift in western thinking over time. While the Crusades
was a desperate and ultimately unsuccessful attempt to reopen
pilgrimage access to the Holy Land and help an oppressed
Christian majority living there (Christians were still a
majority in the middle East of the XI century), today many
westerners perceive the Crusades as an unholy, greedy land
Guilt and shame are important, valuable feelings that control
the actions of individuals as well as entire societies.
These feelings are there to keep feelings of anger, revenge
and apathy from exploding into destructive violence. What
is sometimes ignored is that guilt and shame, if used in
excess, can be counterproductive, even self destructive.
of today's world is not pragmatic, it is emotional. A majority
of societies are still based and controlled by shame, not
guilt. Japanese society, Muslim societies, and developing
Latin countries including Honduras, decided that shame,
or getting caught doing something socially unacceptable,
outweigh individual's feelings of guilt. What is lawful
is more important than what is ethical, or moral. As long
as you don't get caught, it's OK.
Shame is triggered when someone finds out about you, or
the people associated with you, breaking public norms and
accepted standards. Guilt, however, is a much more sophisticated
and retrospective thought. Guilt produces a sense of discomfort
and responsibility in a person who believes they've done
something wrong, whether legal or not, whether anyone else
knows about it or not.
Shame is a much more primitive, basic feeling compared to
guilt. I can shame my dog into not eating garbage. But I
have no illusion that he will ever develop a sense of guilt
which will prevent him from eating garbage when I don't
know about it.
Some societies suffer from "the guilt complex"
to a greater degree: French, English and German lead the
way. While the French are still dealing with their responsibility
in Algeria, Algerians I've met have no qualms about confiscating
French properties, or kicking out and massacring any French
wanting to stay in Algeria after independence. The same
thing goes for the Italians kicked out from Libya in 1973.
While Palestinian occupation is an everyday headline, no
one raises an issue of compensation for about one million
Jewish properties confiscated and lost when Jews were kicked
out of Muslim countries in 1948. If you haven't heard about
these injustices, it is because the victims have accepted
the results without raising a fuss.
do feel that there are genuine and good acts of contrition.
Over the last 18 months alone Australian Prime Minister
Kevin Rudd has delivered an apology to Aborigines for past
assimilation policies, the Prime Minister Tony Blair has
said he feels "deep sorrow" for Britain's role
in the slave trade, and the Polish president has apologized
to the 15,000 Jews expelled in 1968.
Pope Benedict XVI apologized for offending Islam in quoting
a Byzantine emperor Manuel II: "Show me just what Muhammad
brought that was new and there you will find things only
evil and inhuman, such as his command to spread by the sword
the faith he preached." Yet no one discusses if the
Manuel II was right--if Islam is a religious belief based
on fear. The discussion is focused on whether Islam was
offended and what can be done to not offend it in the future.
Every time Islam is mentioned, someone self-flaggingly and
with guilt admits: "Christianity has done no better."
story / editorial
/ local news
Busy and Eventful Holiday week fills the island with tourists and
the week didn't go by without incidents. On March 19, Barbara Wojtasek,
43, an American cruise ship visitor from Norwegian Spirit died when
the metal line of the zip-line ride she was on broke. Wojtasek fell
around 20 meters and was transported to the hospital where she died.
The incident took place at the Gumbalimba Canopy Tour in West Bay.
Preliminary investigation points that neither guide nor Wojtasek
were attached to a second, security cable which is a standard practice
during the activity. "The guide didn't follow proper procedure,"
said Marco Galindo, owner of the zip-line, who added that this is
the first time a cable has snapped since the operation began service
The incident follows another death related to the zip-line tourist
activity. In January an employee of another zip-line fell to his
death as he slipped out of his harness and fell. On Roatan and in
Honduras, zip-line is a growing but unregulated tourism industry.
Currently six zip-line tours operate on Roatan.
The week ended with another disturbing event. On Easter Sunday an
American 63-year-old retiree living in Brick Bay was raped and robbed
by two men in their twenties. The armed men broke into her home
around 7:30pm. By March 24 the police had arrested one suspect and
are investigating the case.
wait to board the Utila Princess.
Santa is the busiest time for Honduras and one of the busiest
times in the yearly calendar of the Bay Islands. It is an occasion
to take holidays, but places stress on tourism and transport infrastructure.
By March 17 Utila, Roatan and Guanaja hotels filled to capacity
and stayed filled for the entire Semana Santa week. Galaxy Wave
on Roatan and Island Tours on Guanaja added extra trips to and
from the islands. Several thousand island residents with families
on the coast headed back home while tourists flooded into the
islands, filling hotels and rental homes.
On March 18 a northern cold weather front came to the archipelago
and stayed for two days. With two of its three propellers damaged,
Utila Princess' trips to Utila which are usually no more than
one hour and twenty minutes were taking as long as two-and-a-half
Roatan's passenger ferry operated by Safeway Maritime added five
days of three trips a day, instead of its usual twice daily schedule.
Running at upwards of 90% capacity, the catamaran Galaxy Wave
with 470-passenger capacity was bringing to Roatan as many as
1,400 passengers a day.
College comes to Bay Islands
Students Prepare an Emergency Disaster Plan
to them Utila, and soon possibly other municipalities, can evaluate
current resources, preparedness and plan for a disastrous even. As
part of the 15-page report the students evaluated shelter locations,
medical supplies and warning systems for Utila. "We were looking
for something humanitarian to do," said Leroy Archer, a Union
College support staff. While the smallest of the Bay Island's municipalities
has what looks like the best of the Bay Islands preparedness for a
hurricane, few people remember the last time a hurricane came through
the island. "The people have the attitude: 'It won't happened
to us,'" said Josh Enevoldson, a fourth-year Union College student.
Three other municipalities could receive similar evaluations before
the 2008 Hurricane season begins. "We are waiting an official
letter from the mayors inviting us to do the study," said Prof
For the Union College students the three-month abroad semester is
meant to combine taking classes, immersing in local culture and establishing
a community volunteering.
There are additional plans to provide badly needed services in the
Bay Islands. As soon as August, Union College has a plan to send four
Emergency Technician students with enough resources to stock an ambulance.
The students could stay for 9-10 months and work with and train local
emergency operators already on the island.
Chuck Franklin teaches a class to two Union College students.
If it wasn't for Hugo Chaves the Union College would never have come
to Roatan. The Nebraska University had to end its three year long
abroad program in Venezuela, when in 2007 its 19 students and staff
were placed under house arrest for three weeks. "They said we
weren't welcome there anymore," said Leroy Arches, Union College
support staff member.
Union College has decided to relocate its program to Bay Islands and
on January 22 landed on Roatan. They plan to stay in the Bay Islands
until April 22 and, other than classes, they have volunteered on a
number of community projects.