The oil era saw the rise of public companies, including Petroecuador, Flopec, CNEL, CELEC and CNT. The purpose was to modernize the country avoiding that the development of Ecuador depends on the benefits of multinational companies.

Seen that way, it seemed like a winning initiative. But experience shows that public companies do not work as planned. Petroecuador lacked a stable administration; Today, there is not even a regular general manager. When Petroecuador took over the Texaco operation, it got a first-class business structure with employees accustomed to performance. But soon he contaminated it and lost the chance to have an efficient company.

The Prosecutor’s Office is evaluating the facts and names from the three previous investigations for possible acts of corruption that are attracting the attention of the state

EMCO analyzes profiles for Petroecuador’s management, while unions propose names

Almost two years of government have passed, and Petroecuador has not been able to get a single project out of those it had planned: neither the high-conversion facility for the refinery ($2 billion of private investment), nor the Amistad or Sacha fields, among others. The most advanced tender for the exploitation of gas from oil field flares has collapsed due to errors in the management of the tender by Petroecuador, delaying the investment of 747 million dollars.

CNEL does not invest in maintenance and does not even pay for the energy it receives from power plants. Substations are missing, power poles and cables are falling apart, power outages are a daily occurrence for residential consumers and oil fields. If this happened to a private entrepreneur, the government would punish him and warn him about the cancellation of the concession.

The persons mentioned in the alleged corruption in public companies do not have registered investments in their name nor are they shareholders

A public enterprise is everyone’s, therefore nobody’s. Many employees are hired based on influence rather than merit. These eminently technical companies have excess administrative staff when they need professionals, especially engineers.

Either shareholding is opened, and the state retains the right of veto… or it is simply closed…

‘Turnaround Management’

In a public company, there are no incentives for the work of officials or employees. The best strategy is to do nothing and thus remain unnoticed. The same people who would shine in a private company are worthless in a public one.

Unions get conditions far better than those prevailing in the private sector. Today, 7,339 employees of CNT, CNEL and CELEC filed lawsuits that would mean an additional cost of 223 million dollars for the state, the Primicias portal reports. CNEL’s salary item is equal to its investment budget.

In no man’s land righteous sin. Not a day goes by without a new scandal in a public company. In Petroecuador, a corruption network was created in which officials squandered our oil in exchange for bribes. There are also bribes in the contracts of CELEC and Sucre, the state insurer, in which the insured public companies failed to collect damages. The list is endless.

The central government, which is always short of money, deprives public companies of funds that should go to investments, and they cannot even maintain the facilities they own.

Public enterprises are not meeting their goal. Either a share is opened while the state retains the right of veto, as Spain had in Repsol and Telefónica, and professional management is hired, or they are simply closed and the assets are sold. We have to put an end to this situation. (OR)