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SINGLE SOURCE SOLUTION TO ENERGY COSTS NOT WORKING IN HONDURAS.

Article Excerpt
Honduras' innovative approach to lowering energy prices, a bidding process to select a single vendor, is now mired in disputes as gas prices inexorably rise. In 2006, beset with budget-busting costs of keeping the nation's cars on the road and lamps lit, President Manuel Zelaya hired a US consultant to design a process that would have international oil companies bid against each other for exclusive right to supply the country (see NotiCen, 2006-02-02). The unexpected winner, ConocoPhillips, looked set to take over the franchise--but then came a glitch. The company had no storage facilities in Honduras.

Zelaya attempted to resolve the storage problem in January with an unprecedented decree that ordered other private companies to allow ConocoPhillips to use their facilities. These companies promptly complained to US authorities that their property had been taken. US Ambassador Charles Ford said he had received calls from companies and investors asking "why the government of Honduras expropriated private property of other companies."

Zelaya met with Ford to explain. The decree states that the Honduran state "exercises its contractual right to use the oil-storage terminals of the distributing companies installed in the country for the public good, with the payment of a fair price."

The president said he had invited Ford in for a talk to "give him the...