Jorge Benavides is the third president of the management board of EMCO (Empresa Coordinadora de Empresas Públicas), during the administration of President Guillermo Lasso: after the transition of the controversial Hernán Luque Lecar and Joaquín Ponce, in the same position. Benavides assures that during the three and a half months of his mandate, he worked on issues of transparency of twelve public companies (seven strategic and five non-strategic), he managed to hold 40 management boards, they prepared budgets, business plans. quarterly reports on the achievement of each company’s goals have been made and are known.

What did you find in the companies and what improvements did they make in these three and a half months of management?

Some decisions were made in line with what President Ponce was doing. The challenge was to make public company information transparent. As is well known, a series of topics related to public companies such as Flopec led to the impeachment of the President of the Republic, and there were even calls for a hearing to formulate an indictment in the Encuentro case, in which former President Luque appears. What was requested was that information about the company be available to citizens. Knowledge of the economic, financial situation, budget is key, and for this, work with twelve active public companies is articulated: seven from strategic sectors and five from non-strategic ones.

What kind of information can be already known?

We have built a transparency platform that aims to facilitate access to information from public companies. In this way, we fulfill the legal obligation, but also make transparent the information that is crucial for decision-making within each jurisdiction. At the moment, the tool is already working, and in the next few days contacts will be established in order to socialize a model that is more friendly to citizens.

What raw data do we have on this platform?

For example, budget execution is essential. The budgets are related to the business plan, and overall more than 60% of the budget has already been implemented. Companies such as Petroecuador and Flopec have more than 70%.

How much did they contribute to the budget?

From January to August 2023, strategic companies had revenue of $12.1 billion and generated about $2.1 billion in profit. Of the total revenue, 75% comes from Petroecuador. One of the factors for the important contribution of Petroecuador is the international context and the price of crude oil, both because of the export of crude oil and because of what Flopec is doing. Among the non-strategic companies, the position of Astinava (which is in charge of ship maintenance) can be highlighted. The value realized by the business exceeds 189 million dollars. In this company, the pre-contractual procedure for the dock for ship maintenance was carried out.

Speaking of investments, what about the investment in Flopec vessels that your manager announced?

That won’t happen. The leader made a statement that he was thinking about it, but as a personal opinion. But the board of directors preferred to think about rewiring the existing vessels and maintaining them leasing (leasing), since more benefits are generated due to market conditions.

However, it was said that it is necessary to balance the issue of ship ownership and leasing. Why did you change your mind?

At the moment, as revenues have increased, due to the price of crude oil, it is currently most advantageous to maintain the leasing figure. But there is also the question of the transition of power, so that the new authorities make such decisions.

Are there public companies making losses?

The strategic company that causes the most concern is CNEL (an energy distributor) with a presence in ten provinces. This has three main problems: technical and non-technical energy losses; collective agreements and due portfolio. As for losses, there is energy theft or meter failures. The average energy loss for other distributors is 7%, and for CNEL 17%. Regarding collective agreements, there has been an abuse of constitutional actions so that officials benefit from the Labor Law, while they should be under the Organic Law of Public Enterprises (ZOJP). As for the third problem, we are currently in the phase of identifying debtors, those who have unpaid loans in the company. Tens of thousands of light readers or meters were also purchased to deal with the losses. Since 2018, CNEL has been progressively losing its assets. To date, there has been damage of 472 million dollars. However, there are still outstanding contingents of $200 million that could eventually be added to the statistics. In terms of collective bargaining agreements, approximately $71 million a year goes to nearly 6,000 workers, who receive additional bonuses on top of their wages of more than $1,000 a month.

The country is going through a delicate moment due to the breakdown of electricity, how do you evaluate the management of public companies like CNEL or Celec itself, which apparently did not take measures in time to avoid them?

Companies answer to us as board members. As far as we know, Celec invested more than 80 million dollars in 2021 and 2022, while in 2023 almost 309 million dollars were invested in the renovation of the thermal park. As the management board of Celec, which is responsible for production, an urgent action has already been signed by CNEL and other entities, in order to be able to buy energy for this phenomenon of low water, in more appropriate and better conditions than those that mean buying energy from Colombia. We currently have 70% hydroelectric energy, 25% thermoelectric energy, and 5% we purchase from Colombia. But the Ministry of Energy and Cenace are more responsible for these problems.

In terms of corruption, what has been done, as you said, we are now faced with an investigation by the Prosecutor’s Office involving Mr. Luque….

Within the scope of what is appropriate for us as a board of directors, the Comptroller’s Office has been insisted to conduct appropriate reviews in the administration of Hernán Luque. In the area of ​​criminal responsibility, the Prosecutor’s Office is monitoring this, but we are fully ready to cooperate and provide information. As for the current governance, we have a permanent representative of the Anti-corruption Secretariat in various administrations. Furthermore, as public officials, we must report any type of information related to acts of corruption to the authorities. There is a communication channel where you can request information from companies, mechanisms and dialogue channels to make them more transparent.

Finally, do you think there should continue to be EMCO, which is tied to great power, even its highest authority is classified as the czar of public enterprises?

In order to standardize procedures and procedures and based on what the company law says, I think that coordination of all boards of directors is needed. It is important to understand that the rule cannot foresee all cases of misuse of resources by officials. In 2017, during the presidency of Rafael Correa, changes were made to the structure of the board. Then it was regulated on the basis of the law in the Government of Lenín Moreno and therefore the head of the rector was the president of EMCO. The law may change, but aside from Luque’s case, EMCO fulfills the role of establishing standardization parameters for all companies.