MercoPress. South Atlantic News Agency

Concern over failed sale of abattoir.

The failed bid for the privatization of the Sacor abattoir in Porvenir, Chilean Tierra del Fuego has raised uncertainties about the future of the plant and concern among farmers regarding the coming lamb season.

The government managed Sacor plant is one of the two only main abattoirs in Southern Chile licenced by the European Union and Israel, and should have been sold last week but all tenders were below the price expected by the Chilean Office in charge of divesting government assets, SEP.

Sacor and the other licenced private abattoir virtually have a monopoly over all lamb and mutton sales overseas from Magallanes and Tierra del Fuego.

Sacor vicepresident and regional representative of the Chilean Economy Ministry Bernardo Troncoso anticipated that "unless we receive other instructions from higher above", the abattoir will be operating this coming season.

Much will depended however from the Chilean Office in charge of selling government assets, SEP, who are partly responsible for deciding the future of Sacor and most probably inviting tenders for a new bid.

Daniel Albarrán, CEO of SEP said that a situation-assessment is underway that "coupled with resources availability, operational conditions and above all a decision on how to follow the current process will help us outline the future of Sacor".

Mr. Troncoso revealed that Sacor has began repaying interest and capital on a 5,5 million US dollars credit for modernizing the plant, and has a further 2 million US dollars revolving credit for purchasing animals and paying transport "that is usually refunded at the end of the season".

In an editorial La Prensa Austral from Punta Arenas pointed out that three lessons can be extracted from the failed bid: one, as happened with the recent frustrated Punta Arenas water and sewage system privatization attempt the market does not necessarily coincide with the aspirations of the seller; second, any new process must be done with the necessary transparency and guarantee for all those parties interested, avoiding what happened with Sacor when a semi-confidential assessment of the plant was only distributed among certain prospective bidders. Finally, whatever the next steps a transition period must be clearly determined so that in the event of a sale to the private sector, the continuity of operations in the plant can be ensured avoiding disruptions for farmers and exporters.

When the bidding process was called, Magallanes and Tierra del Fuego farmers associations complained bitterly because they were denied the semi-confidential paper on Sacor and warned about a "potential monopolistic situation" if the two main abattoirs in the region end in private hands.