1998News

President reveals details of CDE privatization plans

In his presentation last night to the Energy Conference of Latin America and the Caribbean (Enerlac ’98), President Leonel Fernández revealed many of the key details about how the privatization of the Dominican Electric Corporation (CDE) will be conducted. Enerlac ’98 is a conference being held all this week at the auditorium of the Central Bank. It is co-sponsored by the 26-nation Latin American Energy Organization (OLADE) and the Technical Secretariat of the Dominican Presidency. The detail revealed by Fernández gaining the most notice is that CDE’s 7,000 employees will be let go at year-end in order for the firm to change hands and organizations. All employees will receive the wages and benefits due them before dismissal, including dismissal pay and the traditional "regalía pascual" (the 13th month of salary Christmas bonus given to most workers in the Dominican Republic by mid-December). Employees will have the option of investing some of the money they receive in shares of the new companies. Most of the workers will likely be hired immediately by the firms that will result from CDE’s reorganization and privatization; those that are not will receive special job placement help from the government. Fernández guaranteed that no CDE employee will end up unemployed as a result of the privatization. Fernández also said that (1) only 50% of the State’s share of CDE value will be sold; (2) bidding will be received December 17-21; (3) so far 19 companies have completed all the requisites to participate in the bidding; (4) the government will assume RD$9 billion of CDE’s debt to multilateral organizations in order to facilitate the privatization, but CDE will remain responsible for its debt to private generators; (5) CDE as such will remain only as the firm responsible for power by hydroelectric plants and for transmission of energy produced in all generating parks; (6) CDE’s other current activities will be split among five new firms: two power generators (Itabo and Haina) and three regional distribution companies (East, South and North).