ROSEAU, Dominica– The main opposition United Workers Party (UWP) has called on the government to disclose the price paid to the Canadian-based energy company, Emera Incorporate, for controlling shares in the Dominica Electricity Company (DOMLEC).
In a statement, while the UWP said that it welcomed the announcement by the Roosevelt Skerrit government that it would use its majority shareholding to lower utility bills, reduce the cost of doing business and create jobs, it wanted it to disclose the amount paid for the controlling 52 percent shares.
“While Government has not disclosed the price paid for the 52 percent shareholding acquired from Emera, DOMLEC shares on the Eastern Caribbean Stock Exchange (ECSE) carried a price tag of EC$3.50 (One EC dollar=US$0.37 cents) on March 31st, 2022 – the day of acquisition.
“At this price, the 10,417,328 issued shares of DOMLEC had a value of EC$36,460,648, meaning a sale price at the market value of EC$18,959,537 for 52% of the shares,” the UWP said in the statement.
“We trust that the share acquisition was executed by the ECSE and conducted by the securities legislation, good corporate governance practices, and ethical standards to prevent injury to minority shareholders and protect the integrity of the market and the securities industry as a whole.”
Last month, Prime Minister Skerrit, in a radio broadcast, did not disclose the amount paid for ownership of the utility company but noted that on several occasions, he had expressed publicly “the need for us to take greater control of our energy security and correct a historical wrong, returning DOMLEC to the ownership of the Dominican people.
“This interest in the ownership of DOMLEC is predicated on the firm belief that our citizens are better served when the country’s main utilities, such as water and electricity, are in the hands of the State,” Skerrit added.
Skerrit told the nation that the former Dame Eugenia Charles government had acquired a majority shareholding in DOMLEC from the Commonwealth Development Corporation (CDC) but was later sold back to CDC in 1997 by a United Workers Party administration.
He said 72 percent of the shares were sold then for EC$21 million.
“This decision to sell was widely viewed as ill-advised and against the best interest of the electricity consumers of this country,” Skerrit said, noting that the majority share ownership of DOMLEC has changed twice since 1997 and that on both occasions, these shares were owned by foreign companies, with the most recent being Light & Power Holdings Ltd. (LPH) of Barbados, a majority-owned subsidiary of Emera Inc.
Skerrit said that although there has been a marked improvement in DOMLEC’s services since Emera Inc. acquired majority shares in April 2013, ‘it has always been the desire of his administration to regain ownership of DOMLEC.
But in its statement, the UWP said that while the initiative to re-purchase DOMLEC “is long overdue,” the ruling Dominica Labour Party (DLP) had spent the last 22 years criticizing the 1997 sale of the government’s 72 percent interest in DOMLEC to the British firm CDC….
It recalled that in September 2003, the DLP government “angrily” accused DOMLEC of “engaging in public disputation and attempts to discredit Government both locally and abroad” and also “communicating with the international community including the International Monetary Fund (IMF), the European Investment Bank and the Caribbean Development Bank (CDB) “to undermine further and intimidate the people of this independent and sovereign state.”
The opposition party said that notwithstanding “the desire of this DLP Government to regain ownership of DOMLEC,” less than one year later, in May 2004, the DLP government allowed the US company WRB Enterprises to take a controlling interest in DOMLEC with 52 percent of the CDC shares while Dominica Social Security purchased the other 21 percent.
It said that in April 2013, the DLP government had another opportunity to acquire the majority shareholding in DOMLEC from WRB. “Instead, it stood aside and looked as Emera INC moved in.
In calling on the government to disclose the amount paid for the controlling share in DOMLEC, the UWP said that it also wanted the government to reveal the source of funds.
“Concerning achieving the goals of building resilience in the energy sector through deliberate action to improve energy security and strengthen growth and economic prospects, we do not believe any of the stated promises will be realized in the absence of enlightened government policy,” the UWP said, such as “private-sector competition for DOMLEC in an open power generation market in which per capita consumption is the lowest in the OECS with the highest unit price.”
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