Lizarraga letter defends P.M. and U.H.S. decisions…

In more news about other multi-million dollar guarantees, a significant part of the controversy surrounding the Universal Health Services debt has been the question of just how all that money accumulated in such a short time. But tonight one of the main principals has come forward not only with his own version of the financial facts, but also to strongly support the ruling People’s United Party government. During his press conference on Thursday morning, the Prime Minister expressed confidence that the Belize Bank liability will be shaved by a substantial amount before final settlement. When prompted about what costs are included in the Belize Bank debt, the P.M. maintained that an accounting team is currently reviewing U.H.S.’s financials and public disclosure will be made to the public as soon as possible. But today, the man at the head of the hospital, Dr. Victor Lizarraga wrote an open letter to the public that clearly outlines his side of the story and his political feelings. Published in both the Amandala and Reporter newspapers, the letter is entitled “Your healthcare should not be a victim of politics” and opens with the statement: “At this juncture, some five months after U.H.S. came under the political microscope, and some five years after U.H.S. has been under constant attack by the U.D.P., it has become clear to me that the political discourse has now become so strident in the naked quest for power that if Belizeans do not pay attention, our politicians will be let off the hook.”

In the full page advertisement, Lizarraga explains how he and his co-investors financed the decision to form their own hospital. According to the doctor, they borrowed four million dollars from the S.S.B., a loan that was eventually transferred to the D.F.C. Shortly thereafter, the group signed an agreement with the corporation for twenty-eight million dollars to build a hospital. But that’s where things started to go south. Lizarraga says, “No disbursements were made from the D.F.C. to the project, so we sought permission from D.F.C. to bridge finance with the Belize Bank temporarily until D.F.C. could disburse. They gave the go-ahead and comfort to the Belize Bank that these advances were short term and would be repaid by the D.F.C. This was a strictly short term measure to save time and money, this was a commercial overdraft, not a development loan as the Belize Bank is not a development bank. Our type project was not their kind of commercial venture so they came on board very reluctantly–only on D.F.C.’s promise of a short term takeout. Unfortunately, the D.F.C. did not provide the prepayments to the Belize Bank and as a consequence, there were severe adverse effects on the Universal Health Services Project. These adverse effects have continued to this day and include the cutback from fifty-eight beds to twenty-eight beds, the interest cost increased from one point two million dollars as projected to start-up to over five million, the construction time overrun by nine months coupled with increased construction costs because of midstream changes, to the tune of five million dollars. We also opened the facility without all of the planned range of medical services which led to a loss of revenue. Working capital that was programmed was no longer available, which meant that we immediately had to use expensive overdraft facilities.”

In the last paragraph of his letter, Lizarraga maintains that: “The Prime Minister who is the head of a responsible government did the correct thing in signing the Universal loan guarantee in December 2004, as this was a project born out of government policy and essential to the country and especially since the D.F.C. having failed the project, was in no position to reassure the Belize Bank.”