The nationalization of Edesur and Edenor: who and why insist on the end of privatization

The image has been recurrent in recent decades. A street cut, tires catching fire and overwhelmed neighbors and merchants who wave banners with the same claim: “36 hours without light”, “Edesur out”, “we can’t take it anymore”, “five days without answers” ​​and the phrases could go on. With record temperatures this week, blackouts regained prominence and the distributor Edesur, with the service concession until 2087, was back in sight. Lawyers, consumers and experts demand urgent nationalization, which 30 years after the privatizations of the Menemist decade seems very far away.

The heat wave did not let up throughout the week and due to the high temperatures, which even set a historical record in the City and Greater Buenos Aires, the power outages were strongly felt in the AMBA. Thousands of people were affected and only this Friday, when the thermometer marked 40 degrees, there were more than 60 thousand users affected (53 thousand from Edesur, 12 thousand from Edenor), with a historical record of electricity consumption: 27,837 MW, according to Camesa.

The demand for the nationalization of Edesur is not new, although it has never been demonstrated the deficiency of a privatized service in 1992, which received millions in subsidies for works not carried out and that in the government of Mauricio Macri benefited fromrate increases greater than 3,000 percent, which were far from being reflected in an improvement in service. In 2019, for example, there was an average of 4.3 power outages for Edenor users and 4.1 for Edesur users, according to data from the National Electricity Regulatory Entity (ENRE), not to mention that a blackout that year left the entire country without electricity for 13 hours on June 16.

The magnifying glass on Edesur

For Oswald Bassanor, from the Association for the Defense of the Rights of Users and Consumers, both Edenor and Edesur have a “remarkable destruction system” and a “deplorable” management for the provision of Energy. However, he warns in dialogue with AM750 Y Page 12 that “Edesur has more overlapping lines and greater decrepitude and abandonment”. “The administration cannot remain in the hands of a company whose sole purpose is the income of foreign currency and the socialization of risks,” he remarks.

“The State must take charge to provide the service, but apart from the irregularities that have occurred in these 30 years of privatization, with such a meager distribution”, he states, and proposes to study the entire system to improve it. And he clarifies that “all the rant against the State is, was and will be an idea of ​​the neoliberal system to disappear the State from the market and that it is only a business of a few.”

Curiously, Edesur belongs to Enel, an Italian state company that produces and distributes electricity and gas and has a presence in several South American urban centers. It was public, then transformed into a joint-stock company, then privatized, and now the Italian state is the main shareholder.

October Group Osvaldo Bassano

“The privatizations failed. Many of these companies must leave Argentina. Your business is not only not viable, but it is detrimental and harmful to the Argentine economy,

Power outages on both sides of General Paz

In July 2020, the The Buenos Aires Ombudsman was one of the first organizations to demand the nationalization of Edesur, or at least the rescission of the contract, which in the province of Buenos Aires provides service to 12 municipalities. “The faults are visible: lack of investment, breach of contract in normal times, problems in summer and winter and an expensive and bad service,” he summarizes before AM750 Y Page 12 the ombudsman, Guido Lorenzino.

For the official, you need terminate once and for all the contract with Edesur for the next 60 years of the concession. “There are alternatives before the nationalization, such as first revoking the concession, and advancing in economic compensation, which is before a cut of five hours and not 36, as is the case today,” he proposes.

Lorenzino makes a key difference between Edesur and Edenor: response time and works in progress. According to the mayors of the concession area of ​​both companies, the firm Edenor – recently acquired by the businessmen Daniel Vila, Jose Luis Manzano and Mauricio Filiberti – has “isolated problems”. “There is no permanent breach, there is some discomfort, but there was always an immediate response,” he says. This week, Edenor was targeted because a fire caused a massive failure in a high voltage line and left 700,000 users without electricity in the midst of the overwhelming heat wave.

October Group Lorenzino

The challenges of state control

The researcher of the Conicet and the Political Economy Area of ​​the General Sarmiento National University, German Pinazo, graphs it accurately: the weight that energy costs have today, due to subsidies, is much greater than what was required 40 years ago, when the energy was managed by the state Electric Services of Greater Buenos Aires (Segba). “It came out 10 times less in terms of GDP,” he poses before the query of AM750 and Page/12. “The State is more expensive subsidies than it cost to support Segba, and households pay much more today than they paid before,” he summarizes.

Pinazo recalls that the privatizations were designed with the peso-dollar convertibility scheme, with rates indexed to the inflation of the U.S. “The companies earned four times what they earn internationally, after the end of convertibility the system is being patched up. The macrismo increased the rates by 3,000 percent and even so, in real terms, the companies invested less in pesos”, he graphs.

October Group Germán Pinazo

“Anything the government does will be branded Chavista or communist, there is an attempt at permanent destabilization,” the researcher analyzes, regarding the correlation of forces facing the management of Alberto Fernandez to give the eventual debate on a nationalization of electricity.

Along these lines, he points out that there are plenty of examples of electricity distributors that are managed by the State, as is the case in North American states, worldwide. “Of the five largest companies in the world in distribution, in France and Italy the main shareholder is the State”, he specifies.

What is going on in the world

A report last year by the Organization for Economic Cooperation and Development (OECD) states that despite the privatizations that dominated the public services market from the end of the 1980s to the present, much of the electricity generation It has State participation.

Pinazo recalls that among the 50 largest generators in the world, there are even companies controlled 100% by the State. It occurs in the United States, Canada, Mexico, Indonesia, and South Africa. In Sweden, Vattenfall is wholly state owned.

Edesur’s response

consulted by AM750 and Page/12, from Edesur they defend themselves and argue that in the last five years there was an investment of 860 million dollars and that the average outage per client was reduced from 33 to 13 hours. “It is far from being the amount we want,” they acknowledge, and rule out that the path is nationalization. “Rather, companies must be provided with sufficient resources to continue improving the service,” they ask.

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