The images were devastating. Elderly people who lived in buildings where they couldn’t get off because the elevators weren’t working. Entire neighborhoods throwing away their food because they had nowhere to store it. Nights of high thermal sensation where one could not even resort to a fan. Restless neighbors, dejected, enraged, because they were left without electricity. The Government took note – in the past week – of the immense frustration which caused the power outages.
From the Executive Power the idea of show “action”. First, with fines of billions of pesos. And then, with the “intervention”, a signal that the Government has sent to show its commitment to the company.
In practice, the intervention it will not be operational. Edesur already has observers since 2014 and there are more than 30 technicians in the regulatory body (ENRE) who are doing an audit.
The mayor of Avellaneda Jorge Ferraresi will not have access no new information. Everything there is to know about Edesur is already in the hands of the Secretariat of Energy or ENRE.
The official argument is that the intervention will help to materialize promised investments from society. The show is set in winter. Electricity consumption increases in the cold months, as thousands of homes do not have access to gas and rely on electric devices for heating.
There are other reasons behind the surgery. Italy’s Enel is trying to get rid of Edesur. It has already sold its generation business to Central Puerto and YPF Luz. The Government is interested in knowing who the possible buyer could be. Nicolás Caputo, considered a “soul brother” by former president Mauricio Macri, was part of Edesur’s holding. It was through Distrilec, the parent company of Edesur.
In Distrilec, Central Puerto and Enel coexist. This was announced by Central Puerto -which bought the Costanera plant from Enel- Caputo no longer has a stakeholder relationship with them. By doing this, it would have paved the way for the businessman to point Edesur. The expectation of a future buyer is change the price situation.
Entrepreneurs who orbit close to Sergio Massa They also see an opportunity for buy at a very low price. An electric utility in a major city does not fall below billions of dollars in stock market valuation in any of the world’s major capitals. But Edesur is obtained for less than 10% of these amounts. For a long-term business, it might be a deal”.
Whoever it is, Edesur’s next owner needs to make heavy investments. It features the company’s underground network signs of tirednessand new substations and works are needed. A private individual will only do it if he knows he can get the money back. The regulatory framework for the electricity service in Buenos Aires has been in force for only two years (2017 and 2018) from the end of 2001 to this part. It’s not a context that can show in the long run.
Massa does not want to expropriate Edesur. You know you should face a millionaire judgement for a much higher value than the company is being sold for. It would also complicate his target reviews with the IMF and his elaborate perception of being a leader “friend”. with companies. On the other hand, in ultra-Christian wing of the Front of All believe it there are many reasons to carry out an expropriation.
The mayors of the southern suburbs, who suffer from Edesur’s shortcomings, are in conflict with society. But not even the option of a new “Segba” (the state-owned company that managed electricity distribution in the city of Buenos Aires and its suburbs until the privatizations of the 1990s) seduces them. they know you have to inject a lot of money for the business to succeed.
The crossroads is completed with the tariff delay. Edesur and Edenor stated, between 2020 and 2022, that the proceeds from the bills were not even enough to pay for the same light they bring to homes and businesses. A mountain of debts has been generated with Cammesa, the wholesale administrator of the electrical system, who was forgiven earlier this year. In this way, through the tariff increases of 2023, the Edenor and Edesur duo starts from scratch and can pay.
The government has announced a segmentation. The idea was that higher income sectors could pay the “full” cost of electricity. But many families have not registered in the grant register.
By not registering, the system puts them in the same bag as the high-income sectors (N1). In February, the government halted the removal of subsidies. Because it found that, in the “high income” category, there are more than a million families who do not have one but who have not been registered in the subsidy register.
Segmentation has been stopped. And that means less tax savings. And that companies may once again lack the funds to pay Cammesa. The supposed fix would crash again.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.