Fitch Ratings - DR Elictricity Sector

drtampa

Bronze
Oct 1, 2004
1,087
29
48
New Ulm, TX
I'm certain that someone has probably already put this up, but just in case no one has:


"Fitch says electricity sector is near collapse. The Fitch Ratings consulting firm has issued a special report, published this week, that says that the Dominican Republic electricity sector is on the verge of a financial crisis caused by electricity losses that are "extremely high", caused fundamentally by theft and low consumer billings.

According to the report, even though the country has the generation capacity more than sufficient to cover demand, "the decision of the government to fix the price of electricity, to tolerate the theft of electricity and to give free electricity has caused a situation whereby there are not sufficient funds that will allow the electricity distribution companies, that are state-owned, to cover their operation expenses and be capable of paying for the electricity that is contracted from the generators."

The report questions the fact that "with the sector balancing on the edge of a crisis, the investors are asking again if the administration of the recently re-elected President Leonel Fern?ndez will have the political will power and the necessary conviction to fix the system."

According to Fitch Ratings, the stand by agreement with the IMF provided the framework for the sector to reach financial sustainability, "but it expired in January 2008 and has not been renewed."

At the same time the report points out that "unfortunately, little was attained during the period that the agreement with the IMF was in effect. Up until now, the government of the reelected president is taking a direction that seems to be headed towards perpetuating instability in the sector instead of eliminating the distortions of the market and forcing compliance with the new Electricity Law."




De Diario Libre
 

bob saunders

Platinum
Jan 1, 2002
32,471
5,902
113
dr1.com
They could keep the price close to the same or with a little increase if they could just stop the theft and no freebies for anyone.