Technical Secretary of the Presidency Temistocles Montas announced yesterday during the Gobierno de la Manana radio broadcast from the Presidential Palace that the government needs to reduce the power sector’s US$650-million fiscal gap to a maximum of US$250 million in order to resume the stand by agreement with the IMF. The government has announced it will secure the necessary funds by issuing a 30% increase to those paying customers who consume more than 200kWh a month. He said the sector’s deficit is in addition to the US$504-million debt contracted by the Mejia administration when it bought back the bankrupt power distribution companies from the Spanish company Union Fenosa in September 2003.
Ruben Montas, the president of the National Power Commission said that the government has made plans to cut this number to US$300 million in 2005 by way of a collaborative strategy with the World Bank and the Agency for International Development of the US. Montas said the government expects to renegotiate the power purchase contracts with the generation companies so that lower cost power may be provided to the power distributors. The plan also envisions the power distribution companies increasing their collection levels, which are currently at all-time lows.
Meanwhile, during the same broadcast, Superintendent of Power Francisco Mendez said that the poor who reside in low-income barrios, where only rarely are there any businesses or individuals who pay for service received, should not complain, but rather be grateful that they are getting hours of free service.
The 30% increase is not unusual news. All throughout 2004, the power distribution companies have been increasing the tariffs charged for the service, placing the burden to meet the deficit caused by the sectors that traditionally have not paid ? the government and the poor ? on the productive sectors.