TEGUCIGALPA Feb 18 The Honduran government is
pushing to grant concessions and sell shares in its ailing
public utilities to ease its growing public debt and pay
companies and workers clamoring for their salaries.
Honduras, one of Central America's poorest countries, closed
2012 with a deficit of 6 percent of GDP, its second highest in
ten years. The fiscal gap was exceeded this decade only in 2009,
when a military coup ousted former president Manuel Zelaya.
The lack of budget resources and growth in outstanding
payments has fueled protests since the end of 2012, with
thousands of public employees taking to the streets to demand
More than 100 infrastructure projects have been suspended by
construction companies for non-payment and firms that supply
drugs and services to state hospitals have threatened to suspend
their services over growing debts.
President Porfirio Lobo is seeking to attract private
investment to capitalize the state-owned National Company of
Electric Energy, ENEE, and the Honduran Telecom Company
HONDUTEL, which, like the National Port Company ENP, operate
with losses that cannot be covered by the state.
"The government is making an effort to deal with the problem
so that we can have the stability we need to honor our debts in
the coming months," said Julio Raudales, minister for planning.
He said one of the government's biggest problems was the "fiscal
gap" at HONDUTEL, ENEE and ENP, which notched losses of $15
million, $200 million and $6 million respectively in 2012.
Raudales also said the country hoped to boost its tax take
through improved collection and by closing some of its tax
exemptions, which deprive the government of about $1.15 billion
Earlier this month, the government leased Puerto Cortes,
Honduras's most important port, to the Philippine company
International Container Terminal Service Inc, for a 30 year
The concession, the country's boldest in almost a decade,
accounts for 90 percent of ENP's operations and will require an
initial investment of at least $624 million to modernize port
infrastructure, officials and company executives said.
"The state has a lack of investment capacity, a lack of
borrowing capacity and is seeking mechanisms that might be
attractive to private investors, like public-private alliances
or the sale of some company shares," said Jose Antonio Pineda,
president of the state's Commision for the Promotion of Public-
Private Alliances, COALIANZA, which promotes plans to capitalize
the ailing companies.
The commission is seeking $400 million each for ENEE, which
operates as a monopoly in the electricity sector and HONDUTEL,
which competes against Mexican magnate Carlos Slim's Claro and
Honduras tried unsuccessfully in 2001 to sell a 51 percent
stake in HONDUTEL for $300 million, but its highest bid - from
Teléfonos de Mexico (Telmex) - came in at just $106 million.
"The government has no choice, it has to seek private
capital for the state-owned firms to prevent them from going
bankrupt or becoming paralyzed. It's also its only way to boost
the economy to a certain extent," said Roldan Duarte, President
of the Honduran College of Economists.
Honduras's fiscal woes have helped the public debt balloon
from $672.7 million in 2008, or 4.7 percent of GDP, to $2.776
billion last year, or nearly 15 percent of national output.