Argentine electricity company under intervention for 180 days

Argentine electricity company under intervention for 180 days

Following seemingly endless power cuts in the Buenos Aires area, Federal Economy Minister Sergio Massa ordered the intervention of suppliers Edesur and appointed Jorge Ferraresi as the company’s new controller for a period of 180 days.

Ferraresi is the current mayor of Avellaneda since 2009. He took unpaid leave to become Territorial Development and Habitat Development Minister between Nov. 19, 2020, and Nov. 1, 2022.

“Situations such as those that thousands of Argentines have had to live through in the last 15 days cannot be tolerated any longer,” Massa said. “Last week a criminal complaint was filed for abandonment of person and fraudulent administration and the executives who run the company were forbidden to leave the country,” he added.

Massa explained that “this intervention will have the task of supervising, controlling, and monitoring the execution of the service works.” It will also reimburse customers for services not rendered.

The minister also pointed out that “the property of the shareholders is not affected, nor is the concession contract affected”, but the control of the effective rendering of the contract of the basic public service to be provided will be carried out. Massa also said future measures were to be announced shortly.

The intervention will not influence operational matters, nor will it affect the company’s assets. Partial reports would mention operational failures and low level of investment by the company, “a chronic and worsened situation in recent times since the communication of the sale of the shareholding package by its controlling company Enel.”

“It cannot be justified that there are so many people without electricity, so many days in a row while the company goes ahead with the sale,” Massa argued.

Economy Ministry sources quoted by local media insisted Edesur was a company up for sale that had turned deficient in the service. Hence the need for the State to intervene to guarantee the rights of consumers.