Ecuadorian President Calls On Carter Centre To Supervise Unconstitutional Sale Of State Electricity Companies (Quito, 7 March 2002) In a last ditch attempt to save the planned sale of the country's electricity distribution companies, Ecuadorian President Noboa yesterday capped a day of lobbying chambers of commerce and provincial and local authorities by stating that he was prepared to bring in an independent agency to supervise the sale, mentioning that he had already spoken to the Carter Centre. However, despite the last minute arm twisting and promises, opposition to the sale (proposed for April 12th) continues to grow. Provincial authorities >from the southern province of Azuay recently arrived in Quito to state their opposition, while on the same day that Noboa launched his sales blitz, the Provincial Council of Pichincha and the Association of Ecuadorian Municipalities also declared their opposition. Indigenous leaders have once again reinforced their decision to stand firm and to “not allow the sale to go ahead”, threatening to call a general uprising if Noboa attempts to push on with his plans. Even the state Solidarity Fund, owner of the 51% of the shares in the company in dispute, and up to the present time collaborator in the planned sale, has expressed its reservations now that the price of US. $375 million has been made public. The resignation of the Fund's manager Luis Burbano was announced today by the country's Vice President, Pedro Pinto. A apart of the general dissatisfaction can be traced to the recent disclosure by the daily el Expreso de Guayaquil that the companies' new owners will be a guaranteed a below market price for the supply of electricity in the coming years. The fact that the private sector owners will be able to quickly recover their investment due to subsidised rates while the price to the consumer continues to rise by 5% per month in order to meet market conditions, has not been well received. The government does have its supporters however in the major industrial and business groups in the country. Francisco Alarcon, the president of the Industrial Council of the Province of Guayas, the country's commercial centre, recently placed his support behind Noboa stating that the most important aspect of the sale was not the price but rather that the country could no longer afford the “inefficiency of the unions” . The union has its own response. Edgar Ponce, leader of the Quito Electrical Union, mentioned that amongst other options a number of organisations including his own were considering the possibility of legal action against Salomon Smith Barney, the U.S. based company which evaluated the worth of the companies and which will receive a percentage of the sale if it in fact does take place. According to Ponce the action would be based on the fact that the company has participated knowingly in a process which has clearly been ruled unconstitutional by the country's Constitutional Tribunal. Salomon Smith has in fact warned the Ecuadorian authorities that the ruling of unconstitutionality is a serious barrier which has to be overcome. However, their continued presence in a process already ruled illegal sparks not only legal but ethical questions, questions which may be hard for them to answer, especially in the aftermath of the Enron/Anderson scandal. Gerard Coffey Centro de Informacion Sobre la Globalizacion Quito Ecuador Tel: 593-2-222-4018 "Centro de Informacion Globalizacion"
Focus on the Global South (FOCUS) c/o CUSRI, Chulalongkorn University Bangkok 10330 THAILAND Tel: 662 218 7363/7364/7365/7383 Fax: 662 255 9976 E-mail: N.Bullard@focusweb.org Web Page http://www.focusweb.org
Ecuador | AGP