A demonstration against power cuts on March 15, in front of the headquarters of the energy distribution company Edesur. ALFREDO LUNA/AFP
After major power cuts, the government implicates a subsidiary of the Italian Enel.
The Argentine government is taking matters into its own hands after massive and recurrent power cuts affecting thousands of residents of Buenos Aires for several weeks. Blaming the poor management of the private operator, the Minister of Economy, Sergio Massa, announced Monday evening a takeover “temporary” of the energy distribution company Edesur, controlled by the Italian giant Enel. The group has also decided, as part of a strategy to refocus its operations in Europe, to sell its Argentinian assets.
The left-wing government of Alberto Fernandez asked the Argentine electricity policeman “to proceed with the seizure for 180 days of the Edesur company in order to control compliance with the instructions and, above all, the improvement of the service that the company should have”said the minister.
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Beyond the failures of the operator, these disturbances are a new illustration of global warming. Cuts are not unusual in Buenos Aires, but this year the capital is experiencing a particularly hot austral summer, the most intense since the beginning of meteorological records (1906) with a heat wave that lasted more than ten days. Last week, after a historic peak in demand on the electricity grid, powered by air conditioning, some 115,000 homes were without power for several hours. In early March, a massive outage linked to a fire in a field, near high-voltage lines connected to a nuclear power plant, also affected several provinces.
Filing complaint
The deterioration for several weeks has given rise to demonstrations in several neighborhoods of Buenos Aires. Sergio Massa pointed out that “Since February 13, when 180,000 users found themselves without service, there has been a repeated interruption of the medium and low voltage supply, which represents a clear and systematic failure” of service.
On instructions from the Ministry of Energy, the National Electricity Regulatory Authority (ENRE) announced last Thursday that it had filed a complaint against Edesur, which distributes electricity to half of the greater Buenos Aires area, that is nearly 14 million inhabitants. The complaint was filed for “fraud”, “obstructing public services” And “abandonment of people”. ENRE denounced “a chronic investment problem” private electricity operators. The company will have to pay a fine of 2.7 billion pesos (12.3 million euros). This amount will be used to reimburse the bills of users affected by the cuts.
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No question, however, of expropriation. Sergio Massa made it clear that the takeover is “transient and exceptional”. “We want to make it clear that the ownership of the shareholders is not affected, that the concession contract is not affected, but that the State will carry out, through the seizure, the effective supervision of the execution of the contract.» The spokeswoman for the presidency, Gabriela Cerruti, however, did not rule out last week a questioning of the concession following the ENRE audit. Granted in 1992, it is supposed to last another sixty-four years.