Walter Spurrier Baquerizo

Fainting is here to stay, at least for a month and a half. Three or four hours a day until the state contracts the barges, probably with Turkish Karpower.

The inconvenience for citizens is notorious. A difficult problem for companies. Exports will lose competitiveness. For industries with high energy consumption: cement, glass, plastics, metallurgy, disaster. Industrial production will fall, jobs will be lost, less taxes will be collected, and more will have to be imported.

This is a failure of the state-owned power companies, and of the model of monopolistic public companies in general. It is urgent that the new government presents to the Parliament a comprehensive legal reform that facilitates private investments in the so-called strategic sectors.

The model should be judged by its results, not by its ideology. Russians abandoned communism after seventy years of suffering, because it did not improve the lives of citizens. There is nothing wrong with having a state monopoly in electricity or oil, the bad thing is that we Ecuadorians cannot make it work. Our culture does not favor public companies that provide good service; There are exceptions, the stage in Cuenca comes to mind. But monopoly services throughout the country failed. Worse, public companies become dogs in the manger. They neither provide good service nor allow others to provide it.

Electric service is a business: we pay for the electricity. However, public companies do not invest, and when they do, they do it poorly. Coca-Elbow, Sopladora, Toachi-Pilatón… The list is long. The contracting process for the next plant on the schedule, Cardenillo, has not started. Thermal power plants are outdated and should have been replaced or at least maintained and converted to gas, but they were not. In greater Guayaquil, the service is terrible, no investment has been made in substations, transformers or light poles have not been replaced.

Lights, phones and fuel were working. Until statism arrived.

Petroecuador successfully prevented the contracting of gas exploration in the Gulf of Guayaquil that would have served to feed TermoMachala. He is also delaying the concession of the Monteverde terminal, so that the company can adapt it to import natural gas for production (methane) in addition to that for domestic use (propane-butane) and install a large thermal power plant. If that happened, we wouldn’t have fainting spells.

In oil, it did not give way to private investments for the construction of the high conversion unit of the Esmeraldas refinery, with which we would not have to import fuel.

The success of a mixed public-private system is illustrated by the telecommunications sector: if the CNT works well, at a good time, and if not, it is irrelevant because two private operators provide mobile phone services and several other companies provide Internet. There was an opportunity to privatize fixed telephony, but it was not done, and today this service is not used.

This state monopoly model is 50 years old. Previously, fuel processing and marketing were performed by Anglo (Great Britain) and Gulf (USA). Guayaquil was served with electricity by Emelec from Boise Cascade (USA), and telephone service by Ericsson (Sweden). Lights, phones and fuel were working. Until statism arrived. (OR)