ZOLITUR Funds Seven Island Projects
Lps. 15 million to be Spent on Infrastructure, Security, Conservation

September 20th, 2013

[private]The Administrative Commission for the Bay Islands Tourism Free Zone (ZOLITUR) in September approved seven projects for the islands totaling more than Lps. 15 million, most of which is expected to be disbursed before the end of this year.

The newly approved projects are in addition to a Lps. 9 million territorial management/land-use plan that the Spanish firm EPYPSA has been preparing since February and that is expected to be completed by next April, said Victor Moncada, ZOLITUR’s communications director.

By law the $2 tax charged on each cruise ship passenger arriving at Mahogany Bay is to be used for investment projects on the Bay Islands.

By law the $2 tax charged on each cruise ship passenger arriving at Mahogany Bay is to be used for investment projects on the Bay Islands.

ZOLITUR, enacted in 2007, exempted certain island businesses from import duties and certain other taxes. The law also stipulated that revenues collected from the $2 head tax on cruise ship passengers arriving at Mahogany Bay, the $1 tax on ferry passengers from the mainland and capital gains taxes on sales of island property would be used for infrastructure, security, environment and other projects to benefit the Bay Islands. There was also to be a dedicated tax on arriving airline passengers, but it was never implemented.

ZOLITUR’s board – the Administrative Commission, comprising the mayors of the four Bay Islands municipalities, the governor of the Bay Islands, the ministers of tourism, finance and environment and natural resources and the presidents of the Honduran Chamber of Tourism, Bay Islands Chamber of Commerce and Federation of Bay Islands Community Councils (patronatos) – determines how to use the funds. About 30 percent goes to staff and overhead, Moncada said.

The tax-exemption provisions of the law were suspended in January pending a review by a Presidential Commission of all Honduran tax exonerations, which is still ongoing (see July Voice). But other aspects of the law remained in effect as before.

The roughly Lps. 25 million in projects funded in 2013 represents a significant increase compared with previous years, Moncada said, because for the first time the Central Government remitted to the islands the full amount of the funds collected from the capital gains and tourist taxes. In the previous six years, Tegucigalpa sent back only half those revenues, Moncada said.

Moncada said it was unusual for the bulk of the project funding to be announced in the final quarter of the year, but he denied this had anything to do with the November elections.

“We actually wanted to start all these projects early this year,” Moncada said. “But the Administrative Commission took a lot of time” to authorize them. Also, he said, “the exonerations suspension really ate up a lot of our time.”

In the previous two years, Moncada said, the bulk of funds from ZOLITUR were spent on the new municipal pier for Guanaja and the sewage collection and treatment system for Roatan’s West End, each of which received about Lps. 15 million.

The largest of the projects to be funded with this latest tranche will be a municipal pier for Utila, for which Moncada said about Lps. 5.7 million would be spent this year and another Lps. 2.6 million in 2014. Another Lps. 2 million will be allocated to install water tanks on St. Helene, in Santos Guardiola Municipality.

Nearly Lps. 3 million of the new funding will be used to improve security. Moncada said Lps. 1.9 million (of which Lps. 1.3 million to be spent this year) would go to pay for a “diagnostic study” on Bay Islands security needs and to implement the first phase of a municipal security plan, including establishing a 911 emergency number and a system for better controling the arrival and departure of people to and from the islands (see January Voice).

In addition, he said, Lps. 920,000 will be used to expand and improve the existing National Police post in Santos Guardiola to accommodate the additional police that Security Minister Pompeyo Bonilla committed to send there.

Moncada said Lps. 1.2 million (Lps. 400,000 this year) would be used to create a “destination management organization” to diversify and enhance options for tourists.

“One of the main observations we’re getting from international consultancies and international tourism associations is that Bay Islands does not have enough touristic products,” Moncada explained. “We’re only doing sun and surf and now a little bit more shopping with Mahogany Bay.” The new organization, he said, would “promote and create” opportunities for small and micro businesses on the islands to “increase the offer” in areas such as adventure, cultural, agro and culinary tourism.

The remaining 2013 funds will be used to build a new concrete footbridge to the point at Roatan’s Oak Ridge (Lps. 700,000) and to demarcate the Sandy Bay-West End Marine Reserve off Roatan (Lps. 1 million).

For 2014, Moncada said project proposals for ZOLITUR funding were still under preparation.

“We’re probably going to have a little bit more on infrastructure, a little bit more on water and sewage and maybe some sort of help with the Health Department and the Education Department,” he said.

If Tegucigalpa once again remits 100 percent of the funds, and if tourist visits increase, Moncada  said the amount of available funds for projects should be higher in 2014.

“If we could reach the Lps. 35 million mark, it would be great,” he said.[/private]

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