Tens of thousands of homes without electricity for days, complaints that have flourished in municipalities and public bodies, schools that have to be evacuated in a hurry because transformers catch fire: the social crisis unleashed by the deficiency of Edesur’s service forces the national government to face, at this time, the dilemma of whether or not to take away the concession of electricity supply. There has already been an official criminal complaint and the National Electricity Regulatory Entity (ENRE) is advancing in a report that shows how the company is not complying with basic services. But for an important sector of the Frente de Todos that is not enough: we must go for the nationalization of Edesur. More and more pro-government voices are pressing within the national government to advance along this line, and even Máximo Kirchner and some Kirchnerist swordsmen have already begun to design a draft bill along these lines. From one side of the (internal) cries to the other, the conclusion, however, is the same: the situation like this is not enough.
For more than two weeks the infernal heat wave that hits the Buenos Aires Metropolitan Area has plunged an average of 100,000 users per day into anger and uncertainty, who, occasionally or without interruption, find themselves without power. The rain brought some relief, but on Thursday there were still some 62,600 Edesur users without power. The distributor’s off-road excuse is that investments are tied to tariffs and, therefore, they must be raised if there are to be improvements in the infrastructure. However, an ENRE report showed that during the government of Mauricio Macri (2016-2019), when rates increased between 1,600 and 2,100 percent, electricity investments decreased compared to 2015. Furthermore, according to a CEPA report , investments in relation to billing were cut in half during the Cambiemos government.
The case of Esteban Echeverría, a municipality that yesterday filed a criminal complaint against the Edesur authorities, works as a clear example of what has been happening in the southern suburbs since the Italian Enel took over the concession in the 1990s. “They always complain that the rates are not enough for them. When the Macri government began, we signed an agreement in which Edesur promised, within a period of five years, to invest in a substation in Luis Guillón. At that time there was an increase rates at international levels, but Edesur never carried out the works”, complained the mayor Fernando Gray, who boasts of having already won several judicial complaints against the distributor in the last 15 years. “The State has to terminate the concession. With all the breaches that this company has, it cannot continue to provide a service,” he concluded.
He’s not the only one who thinks about it. In the last 24 hours, leaders have not stopped sprouting up who insist that the situation is not enough and that the time has come to take away the concession from Edesur. “EDESUR invoices millions and does not invest. The neighbors organize and there is no response. If they do not comply with their obligation, the way is to take away the concession,” warned the deputy of La Cámpora, Paula Penacca. “We have to take away the concession from Edesur, we can’t keep waiting,” added Buenos Aires senator Teresa García. Some even sought to raise the stakes and began to talk about nationalization.
The claims resonate in Casa Rosada, whose first reaction was to advance a criminal complaint against the Edesur board of directors for “embezzlement, fraud to the detriment of the public administration and abandonment of person.” The national government also instructed ENRE to carry out an audit of the performance of the provision of electricity distribution by Edesur, which must be submitted to the National Congress. “Progress is being made with a report that reveals all the points that are causal for Edesur’s concession to be withdrawn and that it is being done with due care with the corresponding organizations to protect the interests of the Argentine State,” detailed the own presidential spokesperson, Gabriela Cerruti, at a press conference. Why so careful? The government does not want to leave any flank open before a possible lawsuit by the company before the ICSID (International Center for Settlement of Investment Disputes). The contract with Enel is for some 60 more years and the company – which has already announced that it wants to leave the country at the end of the year – has already hired a law firm to litigate before ICSID in the case of a termination, in order to be able to ask for a succulent compensation.
“The concession must be terminated because the company’s breaches and negligence warrant it. But the last thing we want is for the company, after having affected millions of users, to have the possibility of collecting money,” said the defender of the Town of the Province of Buenos Aires, Guido Lorenzino, who also filed a criminal complaint against Edesur.
A project for nationalization
“It is not a question of ‘State yes or State no’, but that the user has the service that he should have,” Cerruti said at the press conference. However, for a sector of the Frente de Todos, the debate has more and more to do with “State yes.” A group of Kirchner deputies is even beginning to design a bill that proposes the nationalization or the purchase of some Edesur shares by the State. “The situation like this does not allow for more. What the company is doing is a scam, and we have to find a comprehensive solution between the Legislative and the Executive Branch,” explained Santiago Igón, president of the Energy Commission and one of the deputies from La Cámpora who is working, together with Máximo Kirchner and other legislators, on the initiative.
There are already previous experiences. The Left Front and the Workers presented in March a project that proposes the expropriation and nationalization of all electric power companies. The provincial block Juntos Somos Río Negro, on the other hand, presented a project last year to transfer Edenor and Edesur to the Buenos Aires and Buenos Aires governments. In this last case, the objective was for the Nation to stop subsidizing the AMBA rates, however there are not a few Buenos Aires mayors who have been demanding something similar for a long time. “The municipalities have to be part of the solution. A consortium must be set up where there is participation of the municipalities and the provincial government, in share matters and also to be part of the investment planning table,” explained the mayor of San Vicente (municipality also hit hard by power cuts), Nicolás Mantegazza.
The Kirchnerism project, meanwhile, is still in its infancy. And, although a text of law is being worked on, it represents more than anything an internal message to President Alberto Fernández asking him to take action on the matter. “It’s not enough with a criminal complaint, that’s a joke,” questioned a Kirchner deputy. The reality is that the parity of forces in the Chamber of Deputies makes the approval of a project of this type practically impossible – given that Together for Change does not agree -, so the initiative is rather a warning to the national government . And a message, in turn, for the IMF itself: “If there is something that has to be made clear, it is that we cannot not give our neighbors an answer to millions because the Fund has our hands tied. That is unacceptable,” said a leader of La Cámpora.