The dream of another paradise and tax heaven like Maritius in Honduras is plagued with a lack of transparency and turmoil.

The model cities are to be states within a state, with their own legal and law enforcement agencies, tax and monetary systems – “Hello US dollar”, “Adiós Honduran lempira”, presumably – and every conceivable facility to attract investment is what is being proliferated around the world as more and more information begins to surface about the ambitious project.

The concept sounds like a pipe dream of a free-market enthusiast. The USA economist Paul Romer has dreamed up the idea of producing cities along the lines of Hong Kong and Singapore, which have created poles of dynamic investment that have spilled over into their once impoverished hinterlands. Even before the real problems began, there was already opposition to the plan.

The Independent’s Suzy Dean wrote back in January, that:

What sets the REDs apart from other charter cities is the belief that in order for the cities to thrive, they must suspend democracy. The un-elected [Transparency] Commission will govern the new city, until they decide the population is ‘ready’ for democracy; only then will new local councils be set up …

The establishment of the Transparency Commission reflects the belief of the Honduran government that the public might “get it wrong”. The Transparency Committee will not engage with or respond to public demands.

The economist Paul Romer has been the guiding voice behind the plans, and was one of the five people originally slated to be on the Transparency Commission. But yesterday, he sent Marginal Revolution’s Tyler Cowen a statement detailing his growing problems with the project. In short, the Transparency Commission has been shuttered, and Romer only even heard about the MGK deal from the press:

From recent newspaper reports, I learned that the Honduran agency responsible for public-private partnerships had signed an agreement about a RED with a private company. When I asked for information, I was told that I could not see this agreement.

This was a departure from the standards of transparency that the administration had led me to expect. It was also a departure from the role for the Transparency Commission outlined in the Constitutional Statute passed by the Honduran Congress.

So the model cities, which were going to have a transparency commission in the place of democratic governance, now have nothing of the sort, just the corporation that runs them.

On top of this, Antonio Trejo Cabrera, a lawyer who had helped to prepare motions declaring the the model cities unconstitutional, was murdered on Sunday.

Antonio Trejo Cabrera, 41, who died early Sunday after being ambushed by gunmen, was a lawyer for three peasant cooperatives in the Bajo Aguan, a fertile farming area plagued by violent conflicts between agrarian organizations and land owners. The most prominent is Dinant Corporation owned by Miguel Facusse, one of Honduras’ richest men. Thousands of once-landless workers hold about 12,000 acres (5,000 hectares) of plantations they seized from Dinant.

Trejo, who was shot six times after attending a wedding, reported threats in June 2011, including a BlackBerry message he received saying:

Trejo, you dog, you have 48 hours to get out or you’re dead.

MGK director Michael Strong said the company is “horrified” by Trejo’s tragic and violent death.

We believe that Antonio Trejo, had he lived long enough to get to know us, would have concluded that our approach is 100 percent beneficial to Honduras and Hondurans. We are saddened for his family and understand what a tragedy this is for trust and goodwill in Honduras

, Strong said.

There is also opposition by the Honduras Congress, who has now decided to take a closer look at this plan, as they realized that the politicians would have no access to “all that money”, and are scrambling trying to come up with ways to get in on the action. There have been proposals that state the “Governor” of the private cities must be a former “Governor or Mayor” of a Honduran province. Another proposal being tossed around in the Honduran congress is that of establishing a general “BANK ACCOUNT” in the name of the Honduran State, where all the monies are to be deposited, and then subsequently disbursed to the “RED”.

Top this all with the fact that a team of Honduran lawyers and scholars adamantly state the agreement violates the Honduran Constitution. UPDATE: Honduran Supreme Court rules private cities unconstitutional

Last, but not least, the latest polls show that approximately 50% of the Honduran population see this whole thing as an invasion on the sovereignty of the country, who tomorrow, Friday, September 28th, celebrates the date that Spain granted Honduras its sovereignty and independence.

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