The Argentine government announced the intervention of the electricity company Edesur, of Italian capital, after weeks of massive power cuts.
Italy's Enel controls 75 percent of Edesur, which is one of Argentina's two largest distributors, and has already announced it wants to sell the company and pull out of Latin America's third-largest economy. But until that happens, it will have the government administratively controlling its operations for at least the next six months.
"We want to certify that the works that have to be done are done," Economy Minister Sergio Massa told Edesur when announcing the intervention. "It does not affect shareholder ownership or the concession contract," he added.
Massa said he believes Enel's decision to withdraw from the company is affecting "in some way" the provision of the service. Edesur has already been criminally denounced by the Argentine government, accused of "abandonment of person" amid power cuts that left between 150,000 and 200,000 people without electricity for days in the midst of one of the most intense heat waves in recent decades.
Edesur has unofficially made it known that the tariff delay imposed by the Argentine government for years is one of the reasons why the service has dropped in quality. The government, however, notes that Edenor, the other large electricity distributor in the metropolitan area of Buenos Aires, is under the same tariff framework and offers a much superior service.
"The concession was established for 99 years and has 69 years left on its contract," La Nacion recalled. The concessionaire has guarantees there that would be heard in his favor in the international arbitration tribunal. The majority controlling company is Italy's Enel, which announced the sale of 51% of the shares from April, through Banco Santander.
The auditor of Edesur on behalf of the government will be Jorge Ferraresi, former Minister of Housing and known for his political closeness to Vice President Cristina Fernández de Kirchner.
Maurizio Bezzeccheri, director of Enel, told "La Nación" that if the government wants to take away the concession it can do so, but that from that it will face a lawsuit in international arbitration tribunals.
According to The Trust Project criteria